News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
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
Wall Street
Bearish
Gold
Bullish
GBP/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
USD/JPY
Mixed
More View more
Real Time News
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.31% 🇯🇵JPY: -0.03% 🇨🇦CAD: -0.07% 🇪🇺EUR: -0.13% 🇳🇿NZD: -0.37% 🇦🇺AUD: -0.44% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/uSIzMa8oqD
  • Heads Up:🇺🇸 Jobless Claims 4-Week Average (19/SEP) due at 12:30 GMT (15min) Previous: 912K https://www.dailyfx.com/economic-calendar#2020-09-24
  • Heads Up:🇺🇸 Initial Jobless Claims (19/SEP) due at 12:30 GMT (15min) Expected: 840K Previous: 860K https://www.dailyfx.com/economic-calendar#2020-09-24
  • Heads Up:🇺🇸 Continuing Jobless Claims (12/SEP) due at 12:30 GMT (15min) Expected: 12300K Previous: 12628K https://www.dailyfx.com/economic-calendar#2020-09-24
  • Heads Up:🇨🇦 Average Weekly Earnings YoY (JUL) due at 12:30 GMT (15min) Previous: 9.4% https://www.dailyfx.com/economic-calendar#2020-09-24
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/yy0NBFGmGR
  • RT @Barnes_Joe: 1: Ahead of the ninth formal round of Brexit trade talks in Brussels, there is a sense of cautious optimism a deal can stil…
  • *BREAKING: Turkish Central Bank regains independence $TRY https://t.co/HwvrRtf08F
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDn8ejP https://t.co/ZcLzt2QlSZ
  • Heads Up:🇬🇧 Winter Economy Plan due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-24
S&P 500 Grasps at New Highs as Retail Traders Fear Past Declines

S&P 500 Grasps at New Highs as Retail Traders Fear Past Declines

2019-04-12 18:30:00
Peter Hanks, Analyst
Share:

S&P 500 Outlook Talking Points:

S&P 500 Grasps at New Highs as Retail Traders Fear Past Declines

As the S&P 500 looks to retest all-time highs, market participants may be more sensitive to risk this time around. With the S&P 500 approaching levels that preceded prior declines in February and September of 2018, investors are keen to investigate each threat to the bullish trend.

One such threat may be the emerging market bond ETF (EMB). The fund saw its largest outflow since February 5, 2018 and the S&P 500 subsequently slumped about 1%. After the streak of outflows was finished and the fund registered its next net inflow (10 days later) the S&P 500 had sunk 4.4%. During the streak, the fund saw nearly $2.2 billion leave its coffers.

Despite the considerable risk-off mood that swept over markets during this period, the S&P 500 rebounded by roughly 2.8% over the following four weeks. It is important to note that previous outflows for the fund trailed declines in the S&P 500 which reduces the efficacy of the fund as a leading indicator and with that in mind, the cause for concern due to the outflow is seriously mitigated.

S&P 500 price chart and EMB ETF

Further, EMB flows were largely unbothered by the index’s decline in September and recorded net inflows through the end of 2018. In fact, Tuesday’s outflow from EMB may be due to a report from the IMF which highlighted emerging market debt as an area of global weakness. While the longer-term implications of emerging market weakness are certainly worrisome, it seems a stretch to pin the outflow as a precursor to another S&P 500 retracement.

View Client Sentiment Data provided by IG to spot hidden trends and signals. To learn more about the tool, sign up for one of our Live Webinar Walkthroughs.

Similarly, mutual fund flows – typically indicative of retail trader funds – have seen roughly $9.70 billion in outflows last week, with the vast majority from equities. The data gathered by the Investment Company Institute bolsters a bullish case – as we typically take a contrarian view to retailer sentiment. This research is compounded by our own findings at IG.

S&P 500 price chart and sentiment

Over the past few weeks, IG retail traders have only increased their short exposure to the S&P 500. During this time, the S&P 500 pressed higher - unbothered by global growth and other concerns. With the advent of earnings season, a string of positive earnings from JP Morgan, Wells Fargo and PNC Bank have set high standards for upcoming reports. Follow @PeterHanksFX on Twitter for equity insight and earnings season updates.

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

Contact and follow Peter on Twitter @PeterHanksFX

Read more: S&P 500 Trading Volume: A Black Hole Around Fed Minutes

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

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

DISCLOSURES