We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • RT @FactSet: $SPX is reporting revenue growth of 2.9% for Q4, led by the Health Care (11%), Utilities (9%), and Communication Services (9%)…
  • The AUD has been hit by the risk-appetite pullback occasioned by the spread of Wuhan-strain coronavirus. This week may see domestic focus return, if headlines allow, with key inflation data due. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/UIpwno0pSq https://t.co/kib4d1mA0q
  • RT @anilvohra69: USD inverted (red) is correlated to Excess Reserves (blue) and Reserve Balances (green). 1/2 https://t.co/bbO1pPWY4F
  • RT @FactSet: $SPX is reporting a decline in earnings of -1.9% for Q4, led by the Energy (-42%), Consumer Discretionary (-14%), and Material…
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/6iMyDFqnqe
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
  • Thanks for having me on @MartinSEssex https://t.co/fg8uOe16wr
  • The MACD is often used with its default setting when entering trades. However, this versatile indicator can be customized to assist traders in exiting trades too. Learn how to better incorporate the MACD into your trading strategy here: https://t.co/HnY7gzsI2q https://t.co/5F1DSvAXyy
  • What are some factors affecting $GBP as we head into 2020, quarter one? Download your Sterling fundamental forecast with @nickcawley1 here to find out: https://t.co/YfDSYSATK9 https://t.co/ANFLIuDY4J
S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

2019-07-19 11:00:00
Paul Robinson, Currency Strategist
Share:

S&P 500/Dow Jones Technical Outlook:

  • S&P 500 pulling back from 3000+, top-side t-line
  • Dow Jones also coming off a top-side trend-line
  • Continue to watch the Russell 2000 as it lags severely

See how the quarterly forecast has played out what it could mean for the big-picture – Q2 Equity Markets Forecast.

S&P 500 pulling back from 3000+, top-side t-line

The S&P 500 topped 3k last week, notching it for the first time ever. In the process of doing so a top-side trend-line dating back to the January 2018 high was tagged. An interesting confluence of a psychological level and form of resistance.

So far, the response has been relatively benign with only a shallow pullback developing. That could change of course, but as long as the market doesn’t fall apart, despite resistance, we will have to respect the generally strong trend.

If, however, we see the market start to turn lower with aggression, then it is possible it is the beginning of a decline out of a Reverse Symmetrical Triangle (RST), or known to some as a Megaphone pattern.

These patterns through their increasingly larger price swings indicate growing instability in a trend and can mark major tops; in this case it would be growing uncertainty in a bull market since 2009 that has been one of the most persistent in history. The time from Jan ‘18 to now is a large span of time for such a topping pattern to develop, which is in good proportion to the extreme bull market run we’ve seen since the depths of the GFC. It’s implications could be quite sizable.

A top and drop could be arriving at an interesting point in time as well given we are heading through the summer towards the fall, a time when stocks have been known to struggle to flat-out get routed.

Check out the IG Client Sentiment page to see how retail traders are positioned and what it could potentially mean for various currencies and markets moving forward.

S&P 500 Weekly Chart (RST/Megaphone)

S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

S&P 500 Daily Chart (Top-side t-line, 3k area)

S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

Dow Jones also coming off a top-side trend-line

The Dow Jones is also trading at the trend-line from January 2018. Following the S&P here as it is the broader index, but keep an eye on how the Dow performs relative to it.

Dow Jones Daily Chart (top-side t-line)

S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

Continue to watch the Russell 2000 as it lags severely

The Russell 2000 is an index I have been discussing with increasing regularity due to the glaring divergence in performance versus large-cap stocks. Small divergences amongst indices are normal and nothing to be alarmed about, but when large-caps (as per the SPX) are trading in record territory and small-caps (as per the R2k) are 12% off their record levels, we could have a problem brewing.

The lack of interest by market participants to pick up higher risk growth stocks is a warning sign of waning risk appetite. With the S&P already building a bearish topping pattern, this further adds to the notion that growing instability may soon come to push the market in reverse. There are other signs too that perhaps the zeal of market participants to own stocks is on the decline; FAANG has lost some interest as it remains below its yearly and record high. (See: GOOG Weighs on FAANG Like FB Did Last Year…)

Russell 2000/S&P 500 Weekly Chart (Major divergence)

S&P 500, Dow Jones, Russell 2000 Technical Landscape is Getting Interesting

To learn more about U.S. indices, check out “The Difference between Dow, Nasdaq, and S&P 500: Major Facts & Opportunities.” You can join me every Wednesday at 10 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar.

Tools for Forex & CFD Traders

Whether you are a beginning or experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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

DISCLOSURES

News & Analysis at your fingertips.