Large Speculator Positions on the S&P 500 Index in Week Ended December 29



S&P 500 Index ends 2017 on a high

The S&P 500 Index (SPY) posted a weekly loss in the last week of 2017 but closed the year at a high. For 2017, the index returned ~20.5%, its third-best annual return since the beginning of the current bull run in 2009. The S&P 500 Index scaled new peaks through 2017, helped by solid economic growth and optimism about market-friendly policies.

Looking at the individual sector performances, the tech sector (XLK) was the standout performer in 2017, with the S&P 500 US Tech sector returning ~37.1% in 2017. The lowest positive returns were seen in the real estate (XHB) sector in 2017, while the energy sector (XLE) posted a minor loss.

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Speculators’ positions remain unchanged   

For the week ended December 29, 2017, large speculator positions in the S&P 500 (IVV) Index increased their bullish positions. The net bullish positions increased from 18,164 contracts to 23,181 contracts on December 26.

This data was reported by the Commodity Futures Trading Commission (or CFTC) through its weekly Commitment of Traders report (or COT). An increase in speculative positions before the end of the year could be a sign that investors are not doubtful about the continuation of the bull run in 2018.

Outlook for the S&P 500 Index

This week, the December jobs report, the ISM manufacturing PMI, and the FOMC meeting minutes are the key economic data to be reported. The US equity markets could receive a further boost from the Trump administration’s expansionary fiscal policy. As a result, the economic data looks set to beat expectations.

A stronger-than-expected ISM manufacturing data report could begin the year on an optimistic note, setting the stage for further gains in the days ahead.

In the next part of this series, we’ll analyze how the US dollar reacted to the passing of tax reform bill and the stop-gap arrangement to keep the government funded.


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