S&P 500 Rally May Stall as Bears Disappear: Technical Analysis

The stock-market rally has driven short interest to a nine-month low and bearish sentiment close to a six-year low, a sign that few investors may be left to propel further gains, Strategas Research Partners said.

Short interest, or total number of shares sold short, fell to 168.8 billion on the New York Stock Exchange and the Nasdaq Stock Market at the end of December, as the Standard & Poor’s 500 Index capped the best quarterly return since September 2009, according to data compiled by Bloomberg. The proportion of respondents in the American Association of Individual Investors survey who expect the market to decline over the next six months reached 17.2 percent this month, down from 50 percent in August.