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S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

S&P 500, FTSE 100, GBP/JPY Trader Positioning – Talking Points

  • IG Client Sentiment hints S&P 500 could rise
  • FTSE 100 outlook pointing bearish however
  • GBP/JPY may turn lower after Shooting Star

In this week’s session on IG Client Sentiment (IGCS), I discussed the outlook for the S&P 500, FTSE 100 GBPJPY. At its heart, IGCS is a contrarian indicator. For a deeper dive into what this means and for fundamental analysis, check out the recording of the session above. In the recording, I also covered gold and silver prices shortly after the 29-minute mark.

S&P 500 Sentiment Outlook – Bullish

The IGCS gauge implies that about 24% of retail investors are net long the S&P 500. Exposure to the downside has increased by about 3% over a daily and weekly basis. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.

S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

S&P 500 Technical Analysis

S&P 500 futures extended gains beyond the all-time high in February. Prices are being guided higher by key rising support from March – red lines. From here, the index may target the 61.8% Fibonacci extension at 3577 having confirmed a breakout above the midpoint at 3452.

S&P 500 Futures – Daily Chart

S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

S&P 500 Chart Created in Trading View

FTSE 100 Sentiment Outlook – Bearish

The IGCS gauge implies that roughly 84% of retail traders are net long the FTSE 100. Net long bets have increased by 12.62% and 26.93% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bearish contrarian trading bias.

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S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

FTSE 100 Technical Analysis

The FTSE 100 has closed at its lowest since May 18, however prices were unable to break under the August 3 low at 5857. Positive RSI divergence warns that downside momentum is fading and that can at times precede a turn higher. Otherwise, further losses expose the May low at 5661.

Follow me on Twitter @ddubrovskyFX for updates on price trends and retail positioning!

FTSE 100 – Daily Chart

S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

FTSE 100 Chart Created in Trading View

GBP/JPY Sentiment Outlook – Bearish

The IGCS gauge implies that roughly 47% of retail investors are net long GBP/JPY. Downside exposure has declined by 1.71% and 42.83% 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 net short.

S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

GBP/JPY Technical Analysis

GBP/JPY has left behind a Shooting Star candlestick pattern, a sign of indecision. A downside close from here could open the door to a reversal as upside momentum fades. That would place the focus on the 140.83 – 141.16 inflection zone on the way towards rising support from late June.

GBP/JPY – Daily Chart

S&P 500, FTSE 100, GBP/JPY Forecasts: Retail Trader Positioning Signals

GBP/JPY Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from September 2nd Report

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter