Dow Jones, S&P 500, NZD/USD, Trader Positioning - Talking Points
- IG Client Sentiment hints Dow Jones may fall next
- Will S&P 500 follow or continue setting new highs?
- NZD/USD at risk to turning lower as long bets rise
In this week’s session on IG Client Sentiment (IGCS), I discussed the outlook for the Dow Jones, S&P 500 and NZD/USD. IGCS is a contrarian indicator. For a deeper dive into what this means and for fundamental analysis, check out the recording of the session above.
Dow Jones Sentiment Outlook - Bearish
The IGCS gauge implies that about 34% of retail traders are net long the Dow. Upside exposure has increased by 5% and 46% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers abearish contrarian trading bias.
![Dow Jones Sentiment Outlook - Bearish](https://a.c-dn.net/b/0thNjI/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_Picture_7.png)
Dow Jones Technical Analysis
Dow Jones futures are idling just under the key 28084 – 28197 inflection zone. A turn lower from here places the focus on the 27312 – 27624 inflection range with key rising support from May sitting just below. The latter could reinstate the focus to the upside. A push above 28197 exposes early 2020 peaks.
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Dow Jones Futures – Daily Chart
![Dow Jones Futures Daily Chart](https://a.c-dn.net/b/4DJW8T/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_Picture_6.png)
Dow Jones Chart Created in Trading View
S&P 500 Sentiment Outlook - Bullish
The IGCS gauge implies that about 20% of retail traders are net long the S&P 500. Exposure to the upside has decreased by 5% and 10% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a bullish contrarian trading bias.
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![S&P 500 Sentiment Outlook - Bullish](https://a.c-dn.net/b/12a85N/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_x0000_i1028.png)
S&P 500 Technical Analysis
S&P 500 futures closed at a record high over the past 24 hours, though remain under the all-time high set on February 20 which makes for key resistance at 3397. A push above this price exposes the midpoint of the Fibonacci extension at 3452. Otherwise, a turn lower places the focus on rising support from April.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![Equities Forecast](https://a.c-dn.net/b/32JkY8/500x707Forecast-Equities.png)
![Equities Forecast](https://a.c-dn.net/b/32JkY8/500x707Forecast-Equities.png)
S&P 500 Futures – Daily Chart
![S&P 500 Futures Daily Chart](https://a.c-dn.net/b/1A4AFm/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_Picture_10.png)
S&P 500 Chart Created in Trading View
New Zealand Dollar Sentiment Outlook - Bearish
The IGCS gauge implies that roughly 47% of retail investors are net long NZD/USD. Upside exposure has increased by 10% and 4% from yesterday and last week respectively. The combination of current sentiment and recent changes offers a bearish contrarian trading bias.
![](https://a.c-dn.net/b/0YPMDo/logo-stripe.png)
![How to Use IG Client Sentiment in Your Trading](https://a.c-dn.net/b/2O1rDk/500x707Advanced-Sentiment.png)
![How to Use IG Client Sentiment in Your Trading](https://a.c-dn.net/b/2O1rDk/500x707Advanced-Sentiment.png)
![New Zealand Dollar Sentiment Outlook - Bearish](https://a.c-dn.net/b/1DJzOG/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_Picture_15.png)
New Zealand Dollar Technical Analysis
NZD/USD may turn lower after prices took out rising support from March, yet follow-through has been somewhat lacking. The 50-day Simple Moving Average caught the pair as prices bounced off the 0.6503 – 0.6537 support zone. A close under the latter could open the door to extending losses.
NZD/USD – Daily Chart
![NZD/USD Daily Chart](https://a.c-dn.net/b/3K1i9s/Dow-Jones-SP-500-NZDUSD-Price-Outlook-Based-on-Retail-Positioning_body_Picture_11.png)
NZD/USD Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from August 19th 00:05 GMT snapshot
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter