Citadel Securities Sees Retail Exodus Setting Stage for S&P Run

Fading sentiment among retail investors may be a sign that a near-term equity rebound is in the making, according to strategists at Citadel Securities.

Individual traders — traditionally one of the stock market’s most bullish cohorts — turned net sellers of US equities and options last week on Citadel Securities’ platform, according to Scott Rubner, an occurrence seen just 18 times since January 2020. The shift follows weeks of volatility in stocks sparked by surging oil prices and the war in Iran.

“We are now seeing early signs of retail capitulation across both cash and options, and retail participation ...