Birmingham , UK

S&P 500, Dow Jones Forecast: Inventory Market Volatility Forward as Retail Merchants Purchase?

s&p-500,-dow-jones-forecast:-inventory-market-volatility-forward-as-retail-merchants-purchase?

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

  • Retail traders have been shopping for into current losses on Wall Road
  • This warns that the S&P 500 and Dow Jones might proceed falling
  • Try this week’s webinar recording for a deeper dive into this

Regardless of current volatility on Wall Road, retail merchants seem like more and more attracted by the reductions being supplied by the market. Lengthy publicity is piling up within the S&P 500 and Dow Jones, in keeping with IG Shopper Sentiment (IGCS). The latter tends to operate as a contrarian indicator. With that in thoughts, if this pattern in positioning continues, might this spell extra bother for the inventory market? For a deeper dive into IGCS, technical and basic evaluation, take a look at the recording of my webinar above!

S&P 500 Sentiment Outlook – Bearish

The IGCS gauge exhibits that about 71% of retail traders are net-long the S&P 500. For the reason that majority of merchants are biased to the upside, this implies that costs might proceed falling. In the meantime, upside publicity has elevated by 4.49% and 15.26% in comparison with yesterday and final week respectively. Taking these into consideration, the mixture of present and up to date modifications in positioning is providing a stronger bearish contrarian buying and selling bias.

S&P 500, Dow Jones Forecast: Stock Market Volatility Ahead as Retail Traders Buy?

S&P 500 Futures Technical Evaluation

S&P 500 futures not too long ago broke below a bearish Head and Shoulders chart formation, opening the door to extending losses for the reason that finish of final 12 months. The help stage at 4029 from Could 2021 was additionally taken out, exposing the 100% Fibonacci extension at 3924. Additional losses would then place the give attention to late March 2021 low at 3843. Rapid resistance may very well be the neckline of the Head and Shoulders, in addition to the 4101 – 4140 former help zone.

S&P 500, Dow Jones Forecast: Stock Market Volatility Ahead as Retail Traders Buy?

Chart Created in Buying and selling View

Dow Jones Sentiment Outlook – Bearish

The IGCS gauge exhibits that about 74% of retail traders are net-long the Dow Jones. For the reason that majority of them are biased to the upside, this hints that costs might proceed falling. That is as upside publicity elevated by 7.81% and 27.34% in comparison with yesterday and final week, respectively. With that in thoughts, the mixture of general and up to date modifications in sentiment are providing a stronger bearish contrarian buying and selling bias.

S&P 500, Dow Jones Forecast: Stock Market Volatility Ahead as Retail Traders Buy?

Dow Jones Technical Evaluation

Dow Jones futures weakened additional into the essential 31951 – 32521 help zone. On Tuesday, the index was unable to substantiate a maintain below this vary, reinforcing it as help. Confirming a breakout below it might open the door to extending losses. Within the occasion of a flip larger, maintain a detailed eye on the falling trendline from April. It might maintain, reinstating the draw back focus.

S&P 500, Dow Jones Forecast: Stock Market Volatility Ahead as Retail Traders Buy?

Chart Created in Buying and selling View

*IG Shopper Sentiment Charts and Positioning Knowledge Used from Could 10th 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 developments that affect the worldwide foreign money markets.

Leave a comment