The S&P 500 (SPX) suffered its worst week since late-February as we broke down under the key short-term moving averages and made new two-month lows. We closed just below VWAP for the week at 4355.25. Friday’s early weakness filled a low-volume gap back to 4,260 before buyers stepped in strong and lifted us back to close on the highs setting up a nice short-term level to trade against. Overall, there remains a lot of supply overhead that we need to clear before getting the ‘all-clear’ for the bulls. Friday’s high is right at the 8-EMA and notable resistance from 4356-4363 before a big cluster of moving averages at 4,405.  There is also an untested VPOC from 9/27 at 4437.50. A pullback would have support at Friday’s VPOC and VWAP from the week’s lows at 4316 and then the low-end of a declining channel. Significant longer-term support is at 4245-4230.

Market Sentiment/Breadth

AAII sentiment for the week ending 9/29 showed a slight dip in bullish responses to 28.1% vs 29.9%. Neutral sentiment rose to 31.1% vs 30.9% while the bearish responses rose to 40.7% vs 39.2%. Bearish sentiment reached a new one-year high. NAAIM Exposure fell sharply back to 55.02, the lowest level since mid-May. Lipper Fund flows had $9.3B of outflows from equities, the second straight week of big money leaving stocks. As of Friday’s close there were 167 new highs vs 202 new lows, weakening breadth. The percentage of stocks above their 50-day MA was 42.84% while those above their 200-day was 59.66% and both modestly higher W/W. NYSI fell again for the week and remains below its 8-EMA, although narrowing and could see a bull cross soon. CBOE Equity P/C ratio 50-MA was 0.505 and flat for the week. CNN Fear and Greed was 27, down from 33 the prior week, and remains in ‘fear.’