S&P 500, Dow Jones, Technical Analysis, Retail Trader Positioning – Talking Points
- Retail Traders proceed to extend brief bets on Wall Street
- Will S&P 500 and Dow Jones lengthen latest positive aspects in consequence?
- Keep a detailed eye on key near-term trendlines for resistance
Looking at IG Client Sentiment (IGCS), retail merchants not too long ago elevated bets that equities on Wall Street could decline forward. Downside publicity is rising within the S&P 500 and Dow Jones. At instances, IGCS can operate as a contrarian indicator. If this development in positioning continues, then the general market could proceed recovering from the volatility seen in January.
S&P 500 Sentiment Outlook – Bullish
The IGCS gauge exhibits that about 55% of retail merchants are net-long the S&P 500. Since most merchants are biased increased, this hints costs could proceed falling. However, draw back publicity has elevated by 7.89% and 5.65% in contrast yesterday and final week respectively. The mixture of present and up to date adjustments in positioning is producing a bullish contrarian buying and selling bias.
S&P 500 Futures 4-Hour Chart
On the 4-hour chart, S&P 500 futures proceed to commerce below a near-term falling trendline from the start of this 12 months. A bullish Golden Cross between the 20- and 50-period Simple Moving Averages (SMAs) stays in play, providing an upside technical bias. Clearing the trendline exposes the 61.8% Fibonacci retracement degree at 4580 earlier than focusing on the 78.6% degree at 4680. Downtrend resumption entails a detailed below the 4212 – 4266 help zone.
Chart Created in Trading View
Dow Jones Sentiment Outlook – Bullish
The IGCS gauge reveals that about 42% of retail merchants are net-long the Dow Jones. Since most merchants are biased to the draw back, this means costs could preserve rising. This is as draw back publicity elevated by 28.75% and 16.09% in comparison with yesterday and final week respectively. The mixture of present and up to date adjustments in positioning are providing a bullish contrarian buying and selling bias.
Dow Jones Futures 4-Hour Chart
On the 4-hour chart, Dow Jones futures are trying to breach a near-term descending trendline from the start of this 12 months. A confirmatory shut above the early February excessive at 35590 could trace at uptrend resumption. That would expose the January 13th peak at 36390 earlier than this 12 months’s excessive at 36832 comes into focus. Downtrend resumption entails a break below the 33031 – 33613 help zone.
Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from February 8th Report
— Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the feedback part under or @ddubrovskyFX on Twitter
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