The S&P broke key 2,080 support to start last week and then fought back to that level which is now resistance, sort and medium term trends now bearish with declining moving averages overhead. The lows held right near the 200 day MA, a level that had not been tested since February, while IchiMoku cloud support also was broken last week, only other time came last October which preceded a much sharper pullback. The 2,040 level becomes a key support level and all indications are more market weakness to come, this level aligning with the March lows as well as 3 year trend support. A break of 2,040 would set up for a move down to 2,000, and if acts similar to October 2014, support would come at this level being the weekly IchiMoku Cloud. The 2,015 level is a 38.2% Fibonacci of the October 2014 to 2015 high range, while 1,977.50 is the 50% Fibonacci. Overhead levels of resistance are 2,080/2,100/2,120.
The latest AAII Sentiment Survey showed bullish sentiment collapse 12.9 points to 22.6%, way below the 38.8% historical average, and bearish sentiment jumped 13.4 to 35.1%, above its 30.3% historical average. The NAAIM Exposure Index continued its decline as well, hitting a multi-month low of 54.84 as active managers remain cautious. Fund flows data showed $10.9B of outflows from equity funds in the past week, one of the largest outflows in 2015. As of Fridays close 107 new highs compared to 183 new lows and just 32.7% of stocks are trading above the SMA50. The CBOE Equity Put/Call closed the week at 0.7 after an intra-week spike to a new 2015 high of 0.94, while Index Put/Call closed the week at 0.94. NYSE Cumulative A/D continues to trend lower, and NYSE Summation remains under pressure and was a leading signal as it kept deteriorating while markets were making new highs. NYSE Cumulative TICK which gave a sell signal on June 25th with a break of its 20 day EMA, remains under pressure. The VIX:VXV ratio is elevated at 0.95 after a recent peak move above 1. Overall, sentiment is extremely bearish which makes it difficult to be shorting at these lower prices, so any kind of positive news sets up for another sharp V-rally.