S&P 500, Dow Jones, Crude Oil, Trader Positioning - Talking Points
- US equities and crude oil prices are eyeing higher highs
- IGCS shows that momentum could hold in the Dow, oil
- In the webinar recording, I also discuss GBP/USD, gold
In this week’s webinar on IG Client Sentiment (IGCS), I discussed the outlook for the S&P 500, Dow Jones and crude oil prices. IGCS is typically a contrarian indicator. Below is a technical breakdown of the assets I covered. For a deeper dive into this as well as fundamental analysis, check out the recording above. In that video, I also discussed the outlook for GBP/USD and gold starting around the 31-minute mark.
S&P 500 Sentiment Outlook - Mixed
The IGCS gauge implies that about 41% of retail investors are net long the S&P 500. Upside exposure has fallen 9.52% over a daily basis while increasing 7.81% over a weekly period. The combination of current sentiment and recent changes offers a mixed trading bias.
S&P 500 Technical Analysis
S&P 500 futures are aiming to test the November 9th high at 3668 after prices pushed above the 3587 – 3541 resistance zone. However, negative RSI divergence shows that upside momentum is fading which can precede a turn lower. In such a case, keep a close eye on the 20-day Simple Moving Average (SMA) for support.
S&P 500 Futures – Daily Chart
S&P 500 Chart Created in Trading View
Dow Jones Sentiment Outlook - Bullish
The IGCS gauge shows that about 30% of retail investors are net long the Dow Jones. Downside exposure has increased by 37.76% and 14.18% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.
Dow Jones Technical Analysis
Dow Jones futures are aiming to close above the November 9th high at 30000, opening the door to venturing into record-high territory. Here there is also negative RSI divergence, which warns that momentum is fading. A turn lower would place the focus on the 20-day SMA which may reinstate the focus to the upside.
Dow Jones Futures – Daily Chart
Dow Jones Chart Created in Trading View
Crude Oil Sentiment Outlook - Bullish
The IGCS gauge shows that about 39% of retail traders are net long crude oil prices. Upside exposure has decreased by 4.31% and 18.39% over a daily and weekly basis respectively. The combination of current sentiment and recent changes gives a stronger bullish contrarian trading bias.
Crude Oil Technical Analysis
WTI crude oil closed at its highest since early March, pushing above the key 41.60 – 43.75 resistance zone. Prices are looking to confirm the breakout, eyeing the 49.42 inflection point from early February. The short-term rising trendline from late October seems to be maintaining the upside narrative.
WTI Daily Chart
Crude Oil Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from November 25th Report
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
