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Dow Jones, S&P 500 Outlook: Will Retail Merchants Flip Internet-Lengthy as Thanksgiving Nears?

dow-jones,-s&p-500-outlook:-will-retail-merchants-flip-internet-lengthy-as-thanksgiving-nears?

Dow Jones, S&P 500, Technical Evaluation, Retail Dealer Positioning – Speaking Factors

  • Retail merchants stay net-short the Dow Jones and S&P 500
  • Nevertheless, this publicity is barely fading forward of Thanksgiving
  • What are technical ranges to observe for which will sign weak spot?

IG Consumer Sentiment (IGCS), retail merchants remained net-short the key benchmark inventory indices on Wall Road for many of this 12 months. These embody the Dow Jones and S&P 500. Nevertheless, current market volatility has been inflicting a few of these bets to unwind forward of the Thanksgiving Day vacation. IGCS tends to be a contrarian indicator. Will the current dip on Wall Road translate right into a significant shift in positioning, and what might this imply? Try this week’s webinar recording the place I focus on this in additional element above.

Dow Jones Sentiment Outlook – Bearish

The IGCS gauge implies that about 44% of retail traders are net-long the Dow Jones. Upside publicity has elevated by 3.74% and 24.33% over a every day and weekly foundation respectively. Since most merchants stay net-short, this means costs might proceed rising. Nevertheless, current shifts in positioning are providing a bearish-contrarian buying and selling bias. Additional upside publicity might trace at losses for the Dow Jones.

Dow Jones, S&P 500 Outlook: Will Retail Traders Flip Net-Long as Thanksgiving Nears?

Technical Evaluation

On the 4-hour chart, Dow Jones futures are eyeing the 200-period Easy Transferring Common. This follows the near-term downtrend since early November. The road has pivoted costs larger lately, sustaining the broader upside focus. That is because the 20- and 50-period SMAs are providing a draw back bias. Clearing the latter two might trace at additional positive factors to return, inserting the give attention to the November 8th excessive at 36446. In any other case, extending losses may even see costs intention for October lows.

Dow Jones Futures 4-Hour Chart

Dow Jones, S&P 500 Outlook: Will Retail Traders Flip Net-Long as Thanksgiving Nears?

Chart Created in Buying and selling View

S&P 500 Sentiment Outlook – Combined

The IGCS gauge reveals that roughly 40% of retail merchants are net-long the S&P 500. Because the majority of traders are nonetheless quick, this means that the broader pattern might stay tilted larger. Nevertheless, upside publicity has climbed by 8.35% over a every day foundation whereas falling by 6.62% over a weekly interval. With that in thoughts, current modifications in positioning are providing a combined buying and selling bias.

Dow Jones, S&P 500 Outlook: Will Retail Traders Flip Net-Long as Thanksgiving Nears?

Technical Evaluation

S&P 500 futures stay biased technically larger on the 4-hour chart. Costs are nonetheless far above the 200-period line because the index consolidates across the 20- and 50-period traces. Furthermore, the important thing 4625 – 4644 help zone stays in play. Clearing the latter may very well be a sign that the following leg of the dominant uptrend might be decrease. Such an end result would place the give attention to the 200-period SMA for follow-through. Clearing the latter exposes October lows. In any other case, uptrend resumption locations the give attention to the 38.2% Fibonacci extension at 4797.

S&P 500 Futures 4-Hour Chart

Dow Jones, S&P 500 Outlook: Will Retail Traders Flip Net-Long as Thanksgiving Nears?

Chart Created in Buying and selling View

*IG Consumer Sentiment Charts and Positioning Information Used from November 24th Report

— Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the feedback part under or @ddubrovskyFX on Twitter

DailyFX gives foreign exchange information and technical evaluation on the traits that affect the worldwide foreign money markets.

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