The S&P 500 (SPX) suffered its worst week since March 2020 as the Nasdaq fell further into correction territory as rising rates pressured tech stocks. The SPX closed below its 200-MA on Friday for the first time since June 2020 and the biggest close below monthly value since March 2020. Momentum indicators are starting to hit extreme oversold levels with both MACD and RSI at levels not seen since early 2020.  We remain firmly in a bear trend but conditions setting up for a potential sharp bounce this week and some key support levels to watch. We’re back insider a high-volume node from Sept./Oct. with 4,372, 4356, and then 4337 key areas of interest. An extreme low will be around 4267. The low-end of January value is up at 4545.50 and aligns with the declining 21-EMA which would be a key area above on a snapback. The 50% retracement of the January range so far is 4595.

Market Sentiment/Breadth

AAII investor sentiment for the week ending 1/19 fell to 21% from 24.9% prior while bearish responses rose to 46.7% from 38.3%. Both readings are near extremes and levels not seen since 2020. NAAIM Exposure for the week to 56.73 from 74.78 and starting to get back near overly bearish levels where we often see a bounce. Lipper fund flows had $2.4B of outflows for the week, the first negative week in the last six. As of Friday’s close we had just 22 new highs versus 1,691 new lows, the worst breadth in years. The percentage of stocks below their 50-day MA was 18.5% while those above the 200-day were 25%, both hitting extremes. NYSI summation fell to -169 and remains below the 8-EMA while NASI fell to its lowest level since early April 2020. Cumulative AD fell to its lowest mark since May 2021 and continues to show weakening breadth. CBOE Equity P/C 50-day MA was 0.522 and rising. Equity-only P/C was 0.82 on Friday, the highest since 5/1/21. NYMO on Friday was -86.06, a major extreme that we’ve only seen twice since March 2020. CNN Fear and Greed closed at 43, down from 58 last week.