The S&P 500 (SPX) put in a weekly hammer reversal last week after trading back to a big volume node from Spring 2021. The Monday low also aligned with VWAP from the November 2020 breakout and the 23.6% Fibonacci retracement of the rally from the 2020 lows. We continued to see range expansion with the 10-day average rising to over 120 points, up from 62.75 a month ago. We closed strong on Friday but remain just below the 8-EMA at 4415 and area that was resistance on Wednesday and Thursday as well. A breakout from this current balance range targets the low-end of January value at 4563-4553. The declining 21-EMA at 4525 is also of note above. Within last week’s range we have notable support at 4365 and then down at 4295. A breakdown under the Monday low could bring a cascade of selling with a downside target near 4110.

Market Sentiment/Breadth

AAII sentiment for the week ending 1/26 saw bullish responses rise to 23.1% vs 21% prior while bearish responses rose to 52.9% vs 46.7%. Neutral sentiment fell to 23.9% vs 32.3%. Bearish sentiment overall hit a new eight-year high while bullish sentiment remains near its lowest levels since Spring 2020. NAAIM Exposure fell modestly to 53.39 and remains near overly bearish levels. Lipper Fund flows for the week ending 1/26 had $4.1B in outflows from equities. As of Friday’s close we had 46 new highs versus 1514 new lows, weak overall breadth. The percentage of stocks above the 50-MA was 17.5% while those above their 200-day was 23%, both near extremes. NYSI fell to -550 for the week and remains well below its 8-EMA. NASI is also well below its 8-EMA. Cumulative AD continued to fall and weakest levels now since April 2021. CBOE Equity P/C 50-day MA continues to rise around 0.651. NYMO hit an extreme on Thursday at -89.11 and closed the week at -57, so plenty of room to rebound still. CNN Fear and Greed fell to 36, down from 43 last week and 60 last month.