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S&P 500 Price Outlook: Trader Positioning Pivots as VIX Spikes


S&P 500 Index, Trader Positioning, Market Sentiment Speaking Factors

  • Choices merchants shift to protecting stance in response to CBOE’s Put/Name Ratio
  • Market circumstances deteriorate following upbeat Non-farms payroll information
  • IG Shopper Sentiment information reveals retail shifting extra bullish on S&P 500

Volatility continues to drive market pricing Friday after a stellar jobs report earlier this morning.This follows a brutal session from Thursday with the index notching a 3.51 % decline, the worst efficiency since early June. At present, the S&P 500 index is down 2.5% as post-NFP enthusiasm shortly light, dragging the markets again right into a risk-off tilt. The tech-heavy Nasdaq index is main the pack decrease, with the NDX index down 4.44%, whereas the VIX index accelerates larger.

S&P 500 Index, NDX Index, VIX Index (15-Min Chart)

S&P 500, NDX 100, VIX Price Chart

Chart created by Thomas Westwater with TradingView

The warning indicators for a bout of risk-aversion flashed throughout markets earlier this week, with the VIX index creeping larger earlier than Thursday. September can also be identified to be a bearish month, by historic requirements. Consequently, cautious market members could have unwound some threat-exposure earlier this weeokay, however given the volatility, the transfer seemingly caught most merchants off-guard.

S&P 500 Index VS CBOE SPX Complete Put/Name Ratio (Every day Time Body)

S&P 500 Index CBOE put call Index Price Chart

Chart created by Thomas Westwater with TradingView

Analyzing dealer positioning, significantly following risk-off occasions reveals helpful info for merchants. One helpful metric is the CBOE’s Put/Name ratio, which measures the quantity of put choices traded towards name choices. Merely put, a ratio underneath 1.Zero recommend choices merchants are positioned on the bullish facet, and over 1.0, to the bearish facet. Nonetheless, the directional pattern within the ratio is equally essential to investigate.

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Thursday’s opening bell had the overall put/name ratio at 0.74, earlier than rising to 0.95 by the shut of the trading session. The rising ratio recommend merchants began shopping for places for draw back safety as the market dropped and/or bought their name positions. This morning’s NFP report briefly pushed the ratio decrease, however as market circumstances deteriorated, the put/name ratio rose above the 1.00 stage, indicating merchants are actually positioned for bearish circumstances.

S&P 500 Index vs IG Shopper Sentiment (Every day Chart)

S&P 500 Price Outlook: Trader Positioning Pivots as VIX Spikes

Wanting on the retail CFD crowd, we will use the IG Shopper Sentiment information to view dealer positioning within the S&P 500 index. The most recent IGCS report reveals 33.12% of merchants are net-long, a 34.34% enhance from yesterday. And net-short positioning dropped 18.22% from Thursday. This motion in shopper positioning hints that the S&P 500 index could proceed to drop when seen by way of a contrarian viewpoint.

–Written by Thomas Westwater, Contributor for

Contact and comply with Thomas on Twitter @FxWestwater

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