Dow Jones, S&P 500, Retail Dealer Positioning, Technical Evaluation – IGCS Equities Replace
- Dow Jones, S&P 500 have been weakening of late
- Retail merchants nonetheless largely brief, however upside bets rise
- This might depart Wall Avenue additional weak forward
The Dow Jones and S&P 500 have been aiming cautiously decrease in latest days. In response, retail merchants have began to extend their upside publicity. This may be seen by taking a look at IG Consumer Sentiment (IGCS). IGCS tends to operate as a contrarian indicator. With that in thoughts, are latest modifications in Wall Avenue positioning hinting that additional losses is perhaps in retailer for equities?
Dow Jones Sentiment Outlook – Bearish
In response to IGCS, solely about 27% of retail merchants are net-long the Dow Jones. For the reason that majority of them are biased decrease, this nonetheless hints that costs might proceed climbing down the highway. Nonetheless, upside publicity has elevated by 7.14% and eight.65% in comparison with yesterday and final week, respectively. With that in thoughts, latest modifications in sentiment warn that the Dow Jones would possibly quickly reverse decrease.
Dow Jones Technical Evaluation
On the each day chart, the Dow Jones was unable to clear the February 2022 excessive of 25752 and it now looks as if the subsequent leg is perhaps a flip decrease. That is additional compounded by adverse RSI divergence, exhibiting fading upside momentum. Rapid assist is the 20-day Shifting Common (MA), clearing decrease exposes rising assist from October.
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S&P 500 Sentiment Outlook – Bearish
In response to IGCS, about 36% of retail merchants are net-long the S&P 500. Since most of them are biased to the draw back, this nonetheless means that costs might proceed rising down the highway. However, upside publicity has elevated by 9.42% and 23.19% in comparison with yesterday and final week, respectively. With that in thoughts, latest modifications in positioning warn that the S&P 500 might quickly reverse decrease regardless of total publicity.
S&P 500 Technical Evaluation
The S&P 500 has fallen for 3 consecutive days, weakening about 1.5 p.c. That marks the worst 3-day interval since early March. Costs additionally broke below and confirmed a push by the 20-day Shifting Common. That has uncovered speedy assist at 4446 which is the 23.6% Fibonacci retracement degree and the 50-day MA. Clearing below the latter opens the door to a stronger bearish technical bias.
Chart Created in Buying and selling View
— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com
DailyFX supplies foreign exchange information and technical evaluation on the traits that affect the worldwide foreign money markets.
