The S&P 500 (SPX) held key support again this week at 4,300 before gapping back higher into monthly value and closing just below VWAP from the September highs. The late-week strength has shifted a lot of sentiment back towards the bulls but some things remain cautious.  We remain below monthly VPOC at 4446 and Friday’s close put us back below the 21- and 55-EMA. There’s also downtrend resistance at 4410 from the September peak. On the flip side, the 8-EMA is sloping higher below at 4363.5 and momentum is starting to shift positively as well with MACD crossing over bullish on Friday and RSI breaking a downtrend on 10/6. Some key areas to watch above include 4420-4427, an open gap and naked VPOC at 4433, and then 4450-4455. Support below is at 4356-4363 and then an open gap at 4354. There’s a naked VPOC below at 4310 as well.

Market Sentiment/Breadth

AAII Sentiment for the week ending 10/6 showed a slight dip in bulls to 25.5% vs 28.1% while bearish sentiment fell to 36.8% from 40.7%. Neutral sentiment rose to 37.7% from 31.1%. Bullish sentiment remains below the long-term average for the fourth straight week. NAAIM Exposure rebounded a bit to 68.6 from the overly bearish level last week of 55.02. Lipper Fund flows had $4.9B of inflows to equities, snapping a two-week stretch that saw $16B leave stocks. As of Friday’s close there were 253 new highs vs 171 new lows, moderate breadth. The percentage of stocks above their 50-day MA rose to 45.91% while those above their 200-day was 59.11% and relatively flat. NYSI summation remains weak at -82 but starting to cross back above the flat 8-EMA in a bullish sign. The key this week will be watching for confirmation higher. NASI remains just below its 8-EMA. NYMO was 10.25, fairly neutral. CNN Fear and Greed was 34, up from 27 last week but remaining overall pessimistic.