We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bearish
More View more
Real Time News
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.01% 🇬🇧GBP: -0.00% 🇦🇺AUD: -0.07% 🇨🇦CAD: -0.10% 🇨🇭CHF: -0.11% 🇯🇵JPY: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/bJhUPVJqTa
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.44% Wall Street: 0.43% US 500: 0.41% France 40: 0.35% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/r4xNYs4vlg
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/rGRzQtgtOb
  • Missed my webinar? See the recording and a bullet point summary of the main topics discussed: - #WEF2020 - EU-US #Tradewar tensions - IMF World Economic Outlook unpacked - Key data to watch for the week ahead - Biggest risks facing the global economy https://www.dailyfx.com/forex/market_alert/2020/01/22/Japanese-Yen--Gold-Prices-May-Retreat-on-Davos-Forum.html
  • The Canadian Dollar and Australian Dollar outlook may favor the downside based on positioning signals. This is as USD/CAD faces the BoC while AUD/USD awaits Australia’s jobs report $USDCAD $AUDUSD #BoC - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/22/Canadian-Dollar-Australian-Dollar-Outlook-Positioning-Hints-Lower.html?CHID=9 https://t.co/lmdXFoEPIp
  • The Japanese Yen has faded into 2020 as market risk appetite has held up and hit demand for haven assets. $USDJPY now challenges a key medium-term downtrend, but hasn’t topped it yet.Get your market update from @DavidCottleFX here:https://t.co/4X6vgCgkB7 https://t.co/cEUZlD8FoF
  • The current astonishing price difference between #crudeoil and #naturalgas may tell us much less about global growth prospects than you might think. The US gas industry is well supplied with shale producers adding to the glut. https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/22/Crude-Oil-Natural-Gas-Prices-Part-Ways-What-Does-This-Mean-.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr
  • My trading video for today: 'Dow, Emerging Markets and Yuan Hit by Coronavirus-Tinged Risk Aversion' https://www.dailyfx.com/forex/video/daily_news_report/2020/01/22/Dow-Emerging-Markets-and-Yuan-Hit-by-Coronavirus-Tinged-Risk-Aversion.html?ref-author=Kicklighter?CHID=9&QPID=917719 https://t.co/vihwKOdVr5
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Silver: -0.29% Gold: -0.41% Oil - US Crude: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/8kdO6Qqkow
  • The $GBP may be on the cusp resuming a 12-year downtrend against the US Dollar as signs of topping emerge at pivotal chart resistance. Get oyur market update from @IlyaSpivak here:https://t.co/9rM3OjWmBA https://t.co/C1voqDy4hc
Dow Jones, Nasdaq 100, S&P 500 Forecast: ETF Flows Hint at Bearishness

Dow Jones, Nasdaq 100, S&P 500 Forecast: ETF Flows Hint at Bearishness

2019-08-06 18:35:00
Peter Hanks, Junior Analyst
Share:

Dow Jones, Nasdaq 100, S&P 500 Forecast:

  • The SPY ETF recorded the largest intraday outflow since October’s equity rout
  • Data from prior outflows of such magnitude suggest equity turmoil may persist
  • Sign up for our Weekly Equity Outlook Webinar to gain stock market insight through the lens of global macro trends.

Dow Jones, Nasdaq 100, S&P 500 Forecast: ETF Flows Hint at Bearishness

Monday saw the Dow Jones plummet over 750 points after a significant escalation in the US-China trade war. Investor confidence was rocked as traders scurried to reduce exposure to the S&P 500, Nasdaq 100 and Dow Jones. ETF flow data recorded by Bloomberg reveals the capital flight for some of the market’s largest funds was similar to that of the reallocation during the equity rout last October.

Investors Ditch S&P 500 Exposure

SPY etf chart flows

To that end, over -$5.2 billion exited the SPY ETF during Monday’s session. The outflow is the largest on an intraday basis since October 11, 2018 when the S&P 500 dropped -2%. Across a broader timeframe, the SPY ETF has now seen almost -$9 billion leave its coffers in the month of August alone. Monday’s outflow puts the year-to-date net flows at a negative $17.4 billion. The staggering exodus of funds is just the seventh instance of an outflow over -$5 billion since the beginning of 2018.

Unfamiliar with past trade wars? Check out our guide,ABrief History of Trade Wars.

That said, Monday’s outflow narrowly made the $5 billion cutoff and is the smallest instance above the watermark. While seemingly an arbitrary hurdle, capital migration of such magnitude - from the world’s most liquid ETF – is indicative of significant risk aversion and suggests larger thematic issues are at play. At present, the greater concern lies with trade wars and investors have signalled they are not comfortable with equity exposure given the current path and pace of escalation in the conflict.

S&P 500 price chart

If history is any indication, prior instances of such outflows are typically followed by continued risk aversion in the week after as evidenced by data from the last 20 months. Whether the theme continues to evolve or the initial explosion results in contagion and sparks further selling, subsequent price action suggests investors are hesitant to jump back into the fray. Given the size of Monday’s jolt, which was comfortably above average, investors may linger on the sidelines for longer.

For updates and analysis on fund flow data along with corresponding historical returns, follow @PeterHanksFX.

As the jitters from the initial shock subside, however, investors appear much more willing to accept risk with an average return of around 0.18% over the following month. With that in mind, we can attempt to chart possible price levels using the average decline in the week to follow using Monday’s closing price.

S&P 500 Price Chart

S&P 500 price chart

Concluding the session at 2,845, another 1.3% chunk out of the S&P 500 would subtract roughly 37 points from the Index and place it around 2,808. This does not include Tuesday’s price action which saw the S&P 500 rebound to the 2,870 area. Still, technical support between spot prices and 2,808 is relatively sparse and above the 200-day moving average. That leaves support around the 2,840 level and the low from Monday’s session at 2,822 as potential levels of buoyance.

While these calculations are far from an exact science and past performance is not indicative of future results, it may give a glimpse of notable price levels if bearishness is to resume later in the week. The fundamental drivers behind the initial move are far from resolved – and have arguably deteriorated further – so there should still be cause for concern among many investors.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Stocks Sink After President Trump Announces New Tariffs on China

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.