The SPX closed slightly lower on the week only due to the late Friday tariff tantrum that coincided with the SPX right at the highs of the month nearly as it filled the gap at 6100 and actually hit a high of 6120 before sliding back to a close near 6040. Overall the market was up over 1% from Mondays opening flush and finished right near the 8 EMA with larger support at the 21 EMA of near 6000. SPX also closed the month of January with a solid gain of +2.75% which modes well for the year ahead as the market has had a positive annual return 83% of years since 1950 when January sees a gain. Next week may start soft with weekend nerves but the first few days of February historically are stronger based on seasonal new month flows and as long as the key 6000 level holds then odds still are with the bulls to work back higher to new highs and likely test that 6165 JPM collar strike at some point in February. A lot of strong individual stocks continue to form bullish setups, but indices will react to headline news in the short term. With the jobs report coming Friday it will also be a key catalyst later this week for price action that continues to be resilient in the face of lukewarm sentiment and macro jitters. If SPX does close below 6000 key support, then the next real support is 5900.

Market Sentiment/Breadth

AAII sentiment for the week ending 1/29 showed bullish responses fell to 41.0% from 43.4% prior while bearish responses rose to 34.0% from 29.4%. Neutral sentiment fell to 25.0% from 27.1%. The bull-bear spread (bullish minus bearish sentiment) decreased 7.1 percentage points to 6.9%. The bull-bear spread is above its historical average of 6.5% for the second time in six weeks. The NAAIM Exposure index fell to 68.28 from 86.08 last week and is below last quarter’s Q4 average of 85.81. Total equity fund flows for the week ending 1/22 had $-7.4 billion in outflows in equities. Friday’s close saw NYSE new highs at 99, while new lows of 30 and the 10-day MA of New High/Low Differential is now positive at +90. The percentage of SPX stocks above their 50-MA is at 51.0% while those above their 200-MA was 62.0%. NYSI Summation index crossed above its 8-MA for a short-term bullish signal. NYMO McClellan Oscillator closed at +16 and is Neutral. The cumulative AD line is firmly above the 40 EMA short term breadth trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA is at 0.55. CNN Fear and Greed index is in the Neutral zone at 46 from 42 last week. The VIX/VXV ratio closed at 0.89. This measures the spread between 1- and 3-month implied volatility, above 1.0 shows fear and can mark a low.