S&P 500, Dow Jones, AUD/USD, Trader Positioning - Talking Points
- S&P 500, Dow Jones, AUD/USD may fall on positioning signals
- Technical analysis shows fading momentum in US stock indexes
- Find your trading personality, optimal forms of analyzing markets
In this week’s session on IG Client Sentiment (IGCS), I discussed the outlook for the S&P 500, Dow Jones and growth-linked Australian Dollar. For an overview of IGCS, fundamental analysis and additional technical analysis, check out the recording of the session in the video above.
S&P 500 Sentiment Outlook
The IGCS gauge implies that 26.72% of retail investors are net long the S&P 500. Those with upside exposure have increased by 11.79% and 4.00% from yesterday and last week respectively. Meanwhile, net short bets have declined by 1.41% and 4.61% over the same period. Recent changes in sentiment warn that the current S&P 500 price trend may soon reverse lower despite the fact traders remain net-short.
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S&P 500 Technical Analysis
On the 4-hour chart below, S&P 500 futures are fast approaching key resistance between 3100 and 3137. This area represents highs from March. Rising support from May seems to be maintaining the uptrend. In the background, negative RSI divergence shows that upside momentum is fading. This could precede a turn lower, perhaps as resistance holds. That may place the focus on support at 2992.
S&P 500 Futures 4-Hour Chart
S&P 500 Futures Chart Created in Trading View
Dow Jones Sentiment Outlook
The IG Client Sentiment (IGCS) gauge implies that 34.57% of retail investors are net long. Over the past 24 hours and week, those long have increased by 5.04% and 7.56% respectively. This is as downside exposure decreased by 3.94% and 5.54% over identical periods. Recent changes in sentiment warn that the current Dow Jones price trend may soon reverse lower despite the fact traders remain net-short.
Dow Jones Technical Analysis
Dow Jones futures are pressuring key resistance at 25809 as rising support from the middle of May maintains the uptrend. Negative RSI divergence does show fading upside momentum which can at times precede a turn lower. A rejection at immediate resistance could place the downside focus towards 24991. Otherwise, uptrend resumption exposes peaks from March around 27075.
Dow Jones 4-Hour Chart
Dow Jones Chart Created in Trading View
Australian Dollar Sentiment Outlook
The IGCS gauge implies that 35.19% of AUD/USD retail traders are net long. Those biased to the upside have increased by 13.00% and 13.50% over the past day and week respectively. Meanwhile net short bets are down 8.57% and 12.92% over the same period. Recent changes in sentiment warn that the current AUD/USD price trend may soon reverse lower despite the fact traders remain netshort.
Australian Dollar Technical Analysis
On the daily chart, AUD/USD is testing a key resistance range between 0.6913 to 0.6939. This is an inflection point that has its beginnings from late October 2019. Standing between the Aussie and current 2020 highs is that barrier. As such, taking it out exposes 0.7032. If resistance holds here, a turn lower may place the focus on rising support from the March bottom, pink line below.
AUD/USD Daily Chart
AUD/USD Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from June 03 Report
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
