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The SPX closed just slightly negative by -0.15% for the week after Friday’s large bearish candle cracked under the 8- and 21-day EMA’s and now looks to rest the 55 EMA at 4440. The market was choppy all week ahead of the big OPEX Friday that saw sellers come out and push prices back under the key 4500 line in sand level that has been seemingly touched each month since July when it cleared above. Resistance is strong at that zone and just above at 4525-4550 while a follow through selloff next week into the more seasonally weaker time period would target a test of 4400 first while key support sits at 4330 but a close below could even accelerate volatility to the downside and see 4300 and 4370 as major supports below with the latter being a level that lines up with the trend channel shown below. RSI is slipping back under 50 as well while MACD sits right at the midline with a potential bear cross nearing.
Market Sentiment/Breadth
AAII sentiment for the week ending 9/13 showed bullish responses decreased to 34.4% from 42.2% prior while bearish responses fell to 29.2% from 29.6%. Neutral sentiment rose sharply to 36.4% from 28.2%. Neutral sentiment is at its highest level since May, and bearish sentiment is below average for the second consecutive week. The bull-bear spread (bullish minus bearish sentiment) decreased 7.4 percentage points to 5.2%. This is the fourth time in five weeks that the bull-bear spread is below its historical average of 6.5%. The NAAIM Exposure index increased to 57.98 from 49.73 and is still under last quarter’s average of 70.22. Lipper fund flows for the week ending 9/13 had $10.5B of inflows in equities, the first week of inflows in 6 weeks. Friday’s close saw NYSE new highs at 45 while new lows of 91 and the 10-day MA of New High/Low Differential is now negative at -23. The percentage of SPX stocks above their 50-MA is 34.2% while those above their 200-MA was 54.4%. NYSI Summation index has crossed back below its 8-MA and in a short term sell signal. NYMO McClellan Oscillator closed at -6 and Neutral. The cumulative AD line is choppy and back below the 40 EMA short term breadth and still just above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.69. CNN Fear and Greed index is in the Neutral zone at 52 from 51 last week. The VIX/VXV ratio is at 0.861, which measures the spread between 1- and 3-month implied volatility, and under 0.80 shows market complacency while above 1.0 exhibits fear.
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CyberArk (CYBR) on 4/17 with an unusual buy of 1000 December 2024 $160/$230 call spreads and a lot of earnings reports due from the group the next two weeks while M&A remains a key theme to the group.
CYBR shares are on a third week of a rally working over VWAP from record highs, triggering a bull weekly MACD cross and weekly RSI to the highest level in 18-months while shares show a major long-term trend inflection. The $160 level is the next challenge and above that the $120/$160 range break measures to $200. Shares are also working on a massive monthly bull engulfing candle.
Chart
Set-Ups
Procore (PCOR) a 2021 IPO and interesting software business is consolidating above its monthly value breakout and key long-term VPOC while just under VWAP from its record highs. Shares are in a narrow range but above $61 should allow for a move to upper value at $68.70.
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Stocks rebounded modestly overnight following the worst sell-off insix months with concerns of rising USD/Yields stemming from the Fed higher for longer forecasts and overall global economic growth softening. The BOJ stuck with its ultra-dovish policy while Flash PMIs for September continued to show contraction. US
PMI numbers came in right around expected levels and remained in growth territory. Chinese internet stocks led the upside movers along with overall Tech strength with Semis and Software climbing and Metals rebounding. Banks, Biotech, Retail and Industrials were groups in the red. It was an ugly week for stocks with the move under the 21-week, MACD sell signal on the weekly and NYSI sell signal. Next week will include GDP and Inflation data along with quarter-end trading. Nine of the 11 S&P 500 sectors logged a decline. The consumer discretionary (-0.9%) and financials (-0.7%) sectors saw the steepest losses while the energy (+0.2%) and information technology (+0.3%) sectors outperformed.
What’s On Tap: A quiet earnings schedule next week with COST, ACN, MU, NKE, CTAS, PAYX, CCL, FERG, JBL, KMX, MTN a few top reports. It will be quarter-end trading without a ton of Macro data, regional Fed Surveys, Durable Goods Orders on Wednesday, GDP and Inflation data Thursday and Consumer Confidence Friday. Investors will start looking towards Q3 reporting season.
Flow
Recap/
Highlights
The start of the week of 9/18 saw cautious flows were seen in the weaker credit card names like COF and DFS with recent monthly metrics a concern on credit strength. We also saw large opening put sales in large cap consumer goods plays CL, KO. Insurance names like PRU, AX saw put buyers. By midweek we saw some near-term bear positioning in Refiners like VLO and MPC. Large Financials JPM, TFC and SCHW saw size opening sales of December calls. We saw some large opening put sales into weakness in growth names like AMD, SQ, ETSY. By Friday we had bullish put sales for January 2024 in small Biotech’s in strong trends with CBAY and RCKT. Uranium plays like NXE and CCJ continue to see upside call buying.
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