traders are growing increasingly confident that us stocks are headed for a selloff but history shows the opposite is more likely according to an analysis by one macro strategist speculative traders are more bearish than at any time in the last decade according to the latest release from the commodity futures trading commmission’s weekly commitment of traders report which tracks futuresmarket positioning in a number of currencies commodities and us equity indexes netshort bets by noncommercial traders in sp 500 emini futures have swelled to 321459 contracts as of april 4 the largest level since october 2011 futuresmarket positioning is generally viewed as a counterindicator by equity strategists meaning the market often does the opposite of what futures traders expect especially when positioning becomes notably crowded in one direction or the other of course the past is no guarantee of future performance over the last 25 years outsize short positioning in futures has typically served as a counterindicator according to brent donnelly a global macro strategist at spectra markets donnelly highlighted six periods since 2000 where positioning in the eminis became notably stretched to the downside during four of those periods the signal turned out to be a bullish indicator meaning that stocks were higher six months to one year later “my impression is it’s probably not any different this time” donnelly said during a phone interview with marketwatch “people are betting on a crisis but i just don’t think it’s going to happen” at the same time that short positioning has been growing sellside equity strategists across wall street have become increasingly pessimistic advising clients that the sp 500 might finally be poised to break lower after rising more than 7 since the start of the year according to factset data see wall street is more pessimistic about stocks than in late 2008 this could be a reason to buy bofa says chris harvey head of equity strategy at wells fargo said in a note to clients shared with marketwatch on monday that his team expects the sp 500 spx to undergo a 10 correction over the next three to six months as us banks pull back on lending exacerbating an economic downturn expected to arrive during the second half of 2023 sean darby chief global equity strategist at jefferies told clients in a note shared with marketwatch on tuesday that he too expects us stocks to retreat based on movements in bond and commodity markets however darby also highlighted an apparent disconnect between futures and actual stocks while futures traders are positioning for a punishing selloff liquidations of cash equity positions have been relatively subdued sp 500 eminis are traded by both retail traders and institutions like hedge funds and commoditytrading advisers trendfollowing firms that use futures and options to take positions in markets traders use futures to hedge their positions or place speculative bets on market moves using margin and embedded leverage to be sure signs of stress have been creeping back into the market over the past week marketleading megacap technology names like microsoft corp msft and apple inc aapl have seen their lead start to slip partly as a result the nasdaq composite comp has fallen during five of the last six sessions through tuesday’s close others have pointed to gold futures trading north of 2000 per ounce and to a pullback in longdated treasury yields as signs of stress the upcoming corporate earnings reporting season is also cause to be nervous since earnings per share for sp 500 companies are expected to decline for the second straight quarter and by the most since the third quarter of 2020 the factset consensus estimate an aggregation of wall street forecasts shows sp 500 earnings per share falling by 68 during the first quarter compared with its level from the same period in 2022 only the dow jones industrial average djia managed to finish higher on tuesday with the sp 500 ending flat and the nasdaq falling as traders await the wednesday inflation report due out at 830 am eastern time