Dow Jones, S&P 500, FTSE 100

Dow Jones, S&P 500, FTSE 100

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
How to Use IG Client Sentiment in Your Trading

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How is IG Client Sentiment a contrarian indicator?

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.

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

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

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

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.

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

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

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

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.

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

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

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

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

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Originally Posted on: https://www.dailyfx.com/forex/technical/article/special_report/2021/03/17/Retail-Trader-Positioning-Outlook-Dow-Jones-SP-500-FTSE-100.html
By: Daniel Dubrovsky

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