FxWirePro: S&P500 rally stalls as bulls show exhaustion; retail sentiment points to bullish bias

Bulls are tired ahead of big events tomorrow,

• Yesterday’s price action made it clear that bulls are exhausted and the price is likely to decline today. Price is indeed down today, however, today may not be suitable to enter fresh longer-term positions as ‘supernova’ Wednesday looms ahead, https://www.econotimes.com/FxWirePro-Are-you-ready-for-supernova-Wednesday-1522919

• With extreme volatility risks around the corner, we are likely to see more profit bookings in S&P500.
• Major trend change is unlikely with events such as U.S. inflation numbers, European Central bank meeting, and EU meeting on Brexit coming due tomorrow.
• The above chart shows that S&P500 is continuing its bull-trend.

Retail sentiment:

• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, points to a bullish bias in the S&P500.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in opposite direction to market movements.
• As of today, according to data from IG markets, only 25 percent of retail positions are bullish on S&P500, while 75 percent are on the short side, giving bullish bias to S&P500.
• However, an extreme level of retail positioning suggests that the reversal might be looming ahead.