The S&P 500 (SPX) finished lower for the week after failing again to break above the declining 55-EMA and 61.8% Fibonacci retracement of the January sell-off. Friday’s sell-off brought price back into the top of balance from the January lows and the psychologically important 4400 level where we saw a modest bounce into the close. The short-term moving averages are now all above price and sloping downward which supports a more cautious short-term bias. Momentum is also starting to wane on the current bounce, too. MACD is nearing a bearish crossover after failing to get back to the zero line while RSI is back near 40. Support below starts in the January low/ balance zone with 4337.50 and then 4294.25. A breakdown further has support at 4239.5 and then down to 4133.25. A bounce-back higher has some notable overhead supply to watch. The monthly VWAP and YTD VWAP are both right around the 4505-4525 range which also aligns with the 8- and 21-EMA. Above that area would be a test of the significant zone around 4580 and 4650.25.

Market Sentiment/Breadth

AAII sentiment for the week ending 2/9 saw another dip in bullish responses to 24.4% from 26.5% prior while bearish sentiment also fell to 35.5% vs 43.7% prior. Neutral sentiment jumped to 40.2% vs 29.9%, a new two-year high. NAAIM Exposure rose again to 66.8 vs 62.54 prior but remains well under-invested.  Lipper Fund Flows had $15.9B of inflows to equities for the week, the largest of the year. As of Friday’s close there were 139 new highs vs 598 new lows, continued weak breadth. The percentage of stocks above their 50-MA is 29.6% while those above their 200-day is 27.7%. NYSI remains below its 8-EMA, a sign of continued caution. NASI actually broke back above its 8-EMA on 2/8 and remains in the early innings of a buy signal. Cumulative AD remains in a bear trend while the 8/21 weekly EMA remains in a bear trend too. NYMO closed at 2.97, a neutral reading. The 50-MA of CBOE Equity P/C ratio was 0.49, complacency. CNN Fear and Greed was 33, down from 35 last week and 64 last month.