S&P 500 - Speculators Are Not Buying This Top

Speculators are not buying this top in S&P 500. According to the COT report, they are actually decreasing their net positions in S&P 500 futures:

Look at the chart above. The area marked in yellow indicates a period when speculators were increasing their long positions (26.9 thousand fresh contracts were added) on S&P 500. Shortly after this period there was a minor correction in prices. Then the index continued its march up.

Now we are encountering a different pattern. Although the index made a fresh top, speculators are currently decreasing their long positions. Last week they were even net SHORT the S&P 500 - look at the chart below:

Generally such pattern precedes an incoming weakness in stock prices. Whenever we see (areas marked in yellow):

• speculators shorting the index

but

• stock prices still going up

a substantial correction is expected.