FxWirePro: S&P500 broader bull-trend still intact; next target 3200

Bulls remain in charge,

• Since bottoming in January, the U.S. benchmark stock index S&P500 has returned 21 percent so far, and price actions suggest that the benchmark likely to continue its upward march.
• From its bottom around 2740 area in the month of May, the index is up 8 percent.
• While selling is expected around the peak, our forecast suggests that the S&P500 index likely to move beyond the 3000 mark in the medium term.
• The index (SPX500) is currently trading at 2961.

Retail sentiment remains in favor of the bulls,

• 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, strongly suggest that the broad trend is still bullish for S&P500 index.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in the opposite direction to market movements.
• As of today, according to data from IG markets, only 33 percent of retail positions are bullish on S&P500, while 67 percent are on the short side, suggesting further upside possibility for the S&P500. However, long retail positions have increased from 24 percent to 33 percent.

Forecast:

• Our calculations at FxWirePro suggests that the index is likely to cross the 3000 barrier and reach our next forecasted target of 3200 area in the medium term.
• The rate cuts by the Federal Reserve likely to support the index bulls.