Weekly Market View 1-9-22
The S&P 500 (SPX) pulled back off of all-time highs last week and now back at the top of the prior balance, the rising 55-EMA and VWAP from the December lows. SPX has held up much better than the Nasdaq (NDX) which has been leading the broader markets and back at longer-timeframe support but well below its 8-, 21- and 55-EMA. And, given how the two have acted together so far in 2022, it seems unlikely that SPX will gain much traction this week without a meaningful bounce in NDX. Momentum has been weakening too as we had a bearish MACD crossover on 1/6 while RSI broke an uptrend. There’s short-term resistance above at 4706 and 4719.5 and then supply up at 4769. The 50% retracement of last week’s range is at 4730.5. A move under Friday’s lows has room down to VWAP from the October lows at 4593.75, 4575 and then 4550.
AAII sentiment for the week ending 1/5 showed a slight dip in bulls to 32.8% vs 37.7% while bearish sentiment rebounded to 33.3% from 30.5%. Neutral sentiment rose to 33.9% from 31.8%. NAAIM Exposure rose to 89.54 as it continues to bounce and overly bullish again. Lipper fund flows has $9.2B of inflows to equities, the third straight week of positive flows. As of Friday’s close, there was 215 new highs versus 447 new lows, weak breadth under the surface. The percentage of stocks above their 50-day MA was 67.94%. NYSI and NASI both remain above their respective 8-EMA and bull trends while the latter is a bit weaker and potential to see a cross back under this week. Cumulative AD remains in a bull trend while the 8/21-week EMA remains in a bull trend too. CBOE Equity P/C 50-day MA is 0.60 and neutral. CNN Fear and Greed was 52, a Neutral reading, and down from 62 last week.