Dow Jones, S&P 500, Wall Street, Technical Analysis, Retail Trader Positioning – Talking Points
- Retail merchants are rising upside publicity on Wall Street
- Is this a warning that the Dow Jones and S&P 500 might fall?
- Check out this week’s webinar recording for additional evaluation
The Dow Jones and S&P 500 have been aiming decrease in latest weeks, falling in-line with losses since topping on the finish of final yr. Recent losses have been more and more related to retrial merchants rising their upside publicity on Wall Street. This may be measured through the use of IG Client Sentiment (IGCS), which frequently acts as a contrarian indicator. If this development in positioning continues, might additional ache be in retailer for danger urge for food?
Dow Jones Sentiment Outlook – Bearish
The IGCS gauge reveals that about 63% of retail merchants are net-long the Dow Jones. Since the vast majority of merchants are biased to the upside, this means that costs might proceed falling. This is as lengthy publicity elevated by 2.63% and 66.49% in comparison with yesterday and final week respectively. With that in thoughts, these combos are providing a stronger bearish contrarian buying and selling bias.
Dow Jones Daily Chart
Dow Jones futures have prolonged losses over the previous few buying and selling classes, bringing costs again into the 32902 – 33623 help zone after rejecting 35281 resistance. This additionally adopted a Bearish Engulfing candlestick sample. A breakout underneath the zone would subsequently place the give attention to March 2021 lows, making for a variety of help between 31951 and 32235.
S&P 500 Sentiment Outlook – Bearish
The IGCS gauge reveals that roughly 62% of retail merchants are net-long the S&P 500. Since a majority are biased to the upside, this means that costs might proceed falling. This is as upside publicity elevated by 2.06% and 22.68% in comparison with yesterday and final week respectively. With that in thoughts, these alerts are providing a stronger bearish contrarian buying and selling bias.
S&P 500 Daily Chart
S&P 500 futures might be within the technique of carving out a bearish Head and Shoulders chart formation. Prices are actually pressuring the neckline and 4101 – 4140 help zone. A breakout decrease might open the door to extending losses in the direction of the May 2021 low at 4029. Beyond that’s the 100% Fibonacci extension at 3924. Otherwise, quick resistance might be the 4224 – 4258 inflection zone.
*IG Client Sentiment Charts and Positioning Data Used from April 26th Report
— Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the feedback part beneath or @ddubrovskyFX on Twitter