Dow Jones, S&P 500, DAX 30 Trader Positioning - Talking Points
- IG Client Sentiment hints Dow Jones may stabilize
- S&P 500 could also see a similar dynamic unfold
- Germany’s DAX 30 facing diverging price signals
In this week’s webinar on IG Client Sentiment (IGCS), I discussed the outlook for the Dow Jones, S&P 500 and DAX 30. 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 where I also outlined the road ahead for GBP/USD and AUD/USD starting around the 28-minute mark.
Dow Jones Sentiment Outlook - Mixed
The IGCS gauge implies that retail traders are about 42% net long the Dow Jones. Downside exposure has decreased by 8.71% over a daily basis while increased 20.75% over a weekly one. The combination of current sentiment and recent changes offersa mixed trading bias.
Dow Jones Futures Technical Analysis
Dow Jones futures seemed to have stabilized after recent losses following a top just under current 2020 peaks. The 50-day Simple Moving Average (SMA) seems to have reinstated the focus to the upside after prices failed to push under the 27312 – 27624 inflection zone. A close above 28197 may precede further gains.
Follow me on Twitter @ddubrovskyFX for updates on price trends and retail positioning!
Dow Jones Futures – Daily Chart
Dow Jones Chart Created in Trading View
S&P 500 Sentiment Outlook - Mixed
The IGCS gauge implies that roughly 38% of retail investors are net long the S&P 500. Upside exposure has decreased 14.79% while downside bets have increased by 13.05% over a weekly basis respectively. The combination of current sentiment and recent changes offers a further mixed trading bias.
S&P 500 Technical Analysis
Following a top around the 61.8% Fibonacci extension at 3577, S&P 500 futures seemed to have stabilized. Prices were caught within the 3337 – 3397 inflection range. The 50-day SMA also held. A push above 3397 could reinstate the focus to the upside. A daily close under the 50-day SMA could risk opening the door to a reversal.
S&P 500 Futures – Daily Chart
S&P 500 Chart Created in Trading View
DAX 30 Sentiment Outlook - Bullish
The IGCS gauge implies that about 39% of retail traders are net long the German DAX 30. Upside exposure has increased 4.82% and 31.24% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.
DAX 30 Technical Analysis
DAX 30 futures could be at risk of a broader pullback as prices trade within a bearish Rising Wedge chart pattern. This also follows persistent negative RSI divergence, a sign of fading upside momentum. A daily close under the floor of the wedge could open the door to a reversal.
DAX 30 Futures – Daily Chart
DAX 30 Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from September 15th Report
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
