Dow Jones, S&P 500, Trader Positioning - Talking Points
- The Dow Jones may rise on positioning signals, will resistance hold?
- S&P 500 pressuring key trend line, but IGCS outlook remains mixed
- Discover your trading personality to help optimize market analysis
In this week’s webinar on IG Client Sentiment (IGCS), I discussed the outlook for equities such as the Dow Jones and S&P 500. For a more detailed overview including fundamental analysis, check out the recording in the video above.
Dow Jones Sentiment Outlook - Bullish
The IG Client Sentiment (IGCS) implies that 40.74% of traders are net long the Dow Jones. Those with exposure to the downside have increased by 7.07% and 22.34% over a daily and weekly period respectively. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias. Psychologically speaking, that may speak to a rising share of traders attempting to pick the next top.
Dow Jones Technical Analysis
Dow Jones futures may be on the verge of pushing above the falling trend line from June’s top. This follows the 50-day simple moving average (SMA) holding at the beginning of this week. Yet, key resistance sits above as the 20-day SMA and the 26193 – 26658 barrier. Pushing above the latter may open the door to revisiting last month’s peak where resistance may hold at 27624. A drop through 24409 opens the door for a reversal.
Dow Jones Futures - Daily Chart
Dow Jones Chart Created in Trading View
S&P 500 Sentiment Outlook - Neutral
The IGCS gauge implies that 32.19% of traders are net long the S&P 500. This is up from about a 25% upside bias before the index topped in early June. Since then, the S&P 500 has declined over 4.5%. Those that are net long have decreased by 13.53% from yesterday while increasing by 5.97% compared to last week. The combination of current sentiment and recent changes gives a further mixed outlook for the S&P 500.
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S&P 500 Technical Analysis
On the daily chart below, S&P 500 futures are pressuring the falling trend line from June and the 20-day simple moving average. Climbing above these key technical barriers still leaves the 3118 – 3156 resistance zone immediately above. Taking this are out could pave the way for a retest of 3231. Otherwise, falling through the 50-day SMA exposes the 2903 – 2965 support range.
S&P 500 Futures – Daily Chart
S&P 500 Futures Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from June 30 Report
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
