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Retail Trader Positioning Outlook: Dow Jones, S&P 500, FTSE 100

Retail Trader Positioning Outlook: Dow Jones, S&P 500, FTSE 100

Daniel Dubrovsky, Senior Strategist

Dow Jones, S&P 500, FTSE 100, Technical Analysis, Retail Trader Positioning - Talking Points

  • Retail trader bets signals mixed between Dow and S&P 500
  • The FTSE 100 may rise alongside fading upside exposure
  • Check out the webinar recording for breakdown of IGCS
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In this week’s session, I covered the outlook for the Dow Jones, S&P 500 and FTSE 100 using IG Client Sentiment (IGCS), a tool gauging retail trader positioning. It is typically a contrarian indicator. For further analysis of where these assets may go, including coverage of fundamentals, check out the recording of the session above.

Dow Jones Sentiment Outlook - Bearish

The IGCS gauge implies that about 27% of retail investors are net long the Dow Jones. Upside exposure has increased by 12.22% and 15.27% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse lower despite the fact traders remain netshort.

Dow Jones Sentiment Outlook - Bearish

Technical Analysis

Dow Jones futures are idling around the 61.8% Fibonacci extension at 32787 following recent gains. Negative RSI divergence does show that upside momentum is fading, which may precede a turn lower. However, the dominant uptrend seems to be upheld by rising support from March 2020.

Dow Jones Futures Daily Chart

Dow Jones Futures Daily Chart

Dow Jones Chart Created in Trading View

S&P 500 Sentiment Outlook - Bullish

The IGCS gauge implies that about 37% of retail traders are net long the S&P 500. Upside exposure has decreased by 7.64% and 13.30% over a daily and weekly basis respectively. The combination of current sentiment and recent changes gives a stronger bullish contrarian trading bias.

S&P 500 Sentiment Outlook - Bullish

Technical Analysis

S&P 500 futures are consolidating around the February high at 2959, following recent gains. Negative RSI divergence is also present here, which warns of a turn lower. But, the key uptrend seems to held intact by rising support from March 2020. Resuming gains places the focus on the 61.8% extension at 4050.

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S&P 500 Futures Daily Chart

S&P 500 Futures Daily Chart

S&P 500 Chart Created in Trading View

FTSE 100 Sentiment Outlook - Bullish

The IGCS gauge implies that roughly 57% of retail investors are net long the FTSE 100. Upside exposure has decreased by 17.11% and 9.99% over a daily and weekly basis. Recent changes in sentiment warn that the current price trend may continue higher despite the fact traders remain netlong.

FTSE 100 Sentiment Outlook - Bullish.

Technical Analysis

The FTSE 100 has been mostly consolidating since 2021 began, but there seems to be a cautious slope of appreciation since November. I have defined this by rising support – see chart below. The 6879 – 6964 zone of resistance appears to be critical in order to resume last year’s bottom.

FTSE 100 Daily Chart

FTSE 100 Daily Chart

FTSE 100 Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from March 17th Report

--- Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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