The SPX had another strong week and after a midweek gap down into the 8 EMA prices were bid up quickly to close higher by +2.5% for the week and hitting a high of 4094 before pulling back to close at 4070. The 4100 level is large resistance from a gamma perspective although those levels have moved up from 4050. The December highs come in exactly at 4100 and 50% retracement from the 2022 highs sits at 4155 so likely the next few levels of interest on the upside but also with FOMC coming this week it opens up the possibility of a very volatile week that can see two-sided price action. Downside support comes in at the 8 EMA now at 4015 then the 21 EMA at 3965 and the 55 EMA is at 3925 and would be strong support as its also YTD VWAP thus far. MACD and RSI are still in bull mode as momentum rises.

Market Sentiment/Breadth

AAII sentiment for the week ending 1/25 showed bullish responses fall to 28.4% from 31.0% prior while bearish responses rose to 36.7% from 33.1%. Neutral sentiment was unchanged at 35.0% from 36.0%. This is the first time since August 2022 that pessimism is below 40% on three consecutive weeks. Bearish sentiment is above its historical average of 31.0% for the 59th time out of the past 62 weeks. The bull-bear spread (bullish minus bearish sentiment) is –8.3%. This is still below the historical average of 6.6%. NAAIM Exposure index increased to 75.23 from 65.07 and is now above last quarters average of 51.03. Lipper fund flows for the week ending 1/25 had $555M of outflows in equities, the 4^th straight week of outflows. Friday’s close saw NYSE new highs at 115 while new lows of 6 and the 10-day MA of New High/Low Differential is positive at +78. The percentage of SPX stocks above their 50-MA is 72.4% while those above their 200-MA was 68.6%. NYSI and NASI Summation indexes are above the 8-MA for a short-term bullish signal. NYMO McClellan Oscillator closed at +50 and is now back near the neutral zone. Cumulative AD line had a strong surge above the 40 EMA and above the 89 EMA long term bull 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 Greed zone at 69 from 59 last week.