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Weekly Market View 1-1-23

Weekly Market View 1-1-23

by | Jan 2, 2023 | Weekly Market View

The SPX had a quiet final week of the year but held firm at the 3800-support level and the 50% retracement continues to find buyers and Friday’s strong close potentially sets up follow through to start the new year as momentum is starting to wane to the downside and MACD is almost near a bull cross while RSI is nudging up near the 50 mid-point. SPX has larger support near the 3700 and 3725 levels below if sellers were to push lower. On the upside, first resistance appears at the 21 EMA currently at 3882 and then the 3900 level while above that has space to get back to the 4000 round number and right where the 200-day MA is at now. The past two weeks have kept prices in this tight range that likely resolves with velocity on a break either above 3900 or below 3800 but seasonality would point higher to start 2023.

Market Sentiment/Breadth

AAII sentiment for the week ending 12/28 showed bullish responses rise to 26.5% from 20.3% prior while bearish responses fell to 47.6% from 52.3%. Neutral sentiment fell to 25.9% from 27.4%. NAAIM Exposure index increased to 43.48 from 39.35 and is below last quarters average of 51.03. Lipper fund flows for the week ending 12/28 had $1.0B of inflows in equities, the 1st week of inflows the past 6 weeks. Friday’s close saw NYSE new highs at 49 while new lows of 72 and the 10-day MA of New High/Low Differential is at -83. The percentage of SPX stocks above their 50-MA is 49.4% while those above their 200-MA was 50.0%. NYSI and NASI Summation indexes are below the 8-MA for a short-term bearish signal. NYMO McClellan Oscillator closed at -9 and is neutral. Cumulative AD line is just under the 40 EMA and still below the 89 EMA long term signal. CBOE Equity P/C 50-day MA at 0.88 and at new highs based primarily on put arb trades skewing the data. CNN Fear and Greed index is in Fear zone at 37 from 38 last week.