Dow Jones, S&P 500, technical analysis, retailer positioning – call points
- Retail investors continue to have strong short US major stock indices
- Rising Dow Jones and S&P 500 short bets offer bullish controversial trading
- However, an examination of the technical analysis seems to suggest a different conclusion
According to the IG Client Sentiment (IGCS), retail investors are aggressively continuing to shorten US benchmark stock indices such as the Dow Jones and S&P 500. IGCS is usually the opposite, especially in a trend market. If traders continue to sell on the recent pricing seen on Wall Street, stocks could have room for further upside potential. For a detailed analysis of how you can use IGCS in your trading strategy, see last week recording to my bi-weekly webinar on this tool.
Dow Jones sentiment outlook – bullish
The IGCS gauge means that about 20% of retail investors are Dow Jones net lengths. Negative exposure has increased by 14.81% and 20.63% daily and weekly, respectively. The fact that traders are short tips may keep prices rising. The combination of this and recent mood swings offers a stronger biased counterparty trading bias.
Dow Jones futures have recently risen to record levels, rising above the 34760-35000 resistance zone after months of consolidation. Nevertheless, a negative divergence in the RSI indicates that the rate of increase is fading. This can sometimes precede a lower turn. Such a result may focus on a 100-day SMA, which may restore the dominant focus.
Daily schedule of Dow Jones futures
S&P 500 sentiment outlook – bullish
The IGCS gauge means that 31% of retail investors have S&P 500 net lengths. Positions have risen 1.62% and 9.07% daily and weekly, respectively. The fact that traders have short hints that prices may continue to rise. The combination of this and recent mood swings offers a stronger bullish-contrarian trading bias.
S&P 500 futures are slowing progress above the 4383-4416 resistance zone, but the pace has been rather slow. A Doji candlestick pattern has appeared, which is a sign of indecision. The downside that follows the doji may hint at future losses. The negative RSI difference also remains. If the material becomes lower, monitor the 100-day SMA closely, the line may reverse the focus.
Daily schedule of S&P 500 futures
* Mood tables and positioning data of IG customers used since August 11th Report
– Written by Daniel Dubrovsky, Strategist For DailyFX.com
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