Dow Jones, S&P 500, Retail Trader Positioning, Technical Analysis – IGCS Equities Update
- Dow Jones and S&P 500 stay weak to elevated volatility
- Retail merchants have elevated their upside publicity in latest days
- From a contrarian standpoint, this will likely trace at extra bother forward
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Following the collapse of Silicon Valley Bank final week and up to date troubles at Credit Suisse, volatility has been permeating all through Wall Street. In response, retail merchants have really elevated upside publicity within the Dow Jones and S&P 500. This might be seen by taking a look at IG Client Sentiment (IGCS). IGCS tends to operate as a contrarian indicator. Could this imply additional ache is in retailer for equities?
Dow Jones Sentiment Outlook – Bearish
According to IGCS, about 64% of retail merchants are net-long the Dow Jones. Since most of them are net-long, this hints costs could proceed falling. This is as upside publicity elevated by 14.64% and 15.14% in comparison with yesterday and final week, respectively. With that in thoughts, the mix of present positioning and up to date adjustments is providing a stronger bearish contrarian buying and selling bias.
Dow Jones Technical Analysis
The Dow Jones is hovering above the important thing 31738 – 32017 help zone, established again in November. This is as costs face the ground of a falling channel from December. As such, this might find yourself being a near-term pivotal technical level, opening the door to a flip larger towards the 50-day Simple Moving Average (SMA). Otherwise, clearing help exposes the 61.8% Fibonacci retracement stage at 31153.
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S&P 500 Sentiment Outlook – Bearish
According to IGCS, about 58% of retail merchants are net-long the S&P 500. Since most merchants are net-long the S&P, this hints costs could proceed falling. This is as upside publicity elevated by 8.91% and seven.84% in comparison with yesterday and final week, respectively. With that in thoughts, the mix of general positioning and up to date adjustments is providing a stronger bearish contrarian buying and selling bias.
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S&P 500 Technical Analysis
The S&P 500 can also be hovering above help. Prices have been unable to clear the midpoint of the Fibonacci retracement stage at 3855.25. Immediate resistance is the 100-day SMA. Clearing larger would open the door to extending good points in the direction of the 23.6% stage at 4041 earlier than focusing on the January excessive. Still, the broader technical bias stays bearish given the breakout below a Rising Wedge in late February. Clearing help exposes the 61.8% level at 3771 in the direction of the October low.
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— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com
To contact Daniel, comply with him on Twitter:@ddubrovskyFX
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