Weekly Market View 10-3-22
The SPX closed lower for the week and end of quarter sellers were in control into Friday although most of the week the 3600 floor of support held amidst plenty of bad news. The 200-week EMA is now being touched just under 3600 and a large level to watch into October as the RSI is showing some positive divergence while MACD in bear mode. The start of a new quarter often flips price action but will need to see a close back over the 8 EMA near 3690 to confirm any signs of that. If the SPX stays weaker then the Feb 2020 pre Covid highs at near 3400 are likely in play going forward on a panic move down while that same level for the QQQ Nasdaq is down around 237 and has a volume pocket under the 260 support zone. With the market starting a new quarter it could setup a look below and fail trade that reverses higher.
AAII sentiment for the week ending 9/28 showed bullish responses rose to 20.0% from 17.7% prior while bearish responses were unchanged at 60.8% from 60.9%. Neutral sentiment fell to 19.2% from 21.4%. The results show pessimism about the short-term direction of the stock market continuing to stay near record high levels. Plus, this week’s bullish sentiment reading ranks among the 50 lowest in the survey’s history. NAAIM Exposure index decreased to 12.61 from 29.59 to the lowest readings since 3/18/2020 as asset managers have virtually no long exposure. Lipper fund flows for the week ending 9/28 had $11.8B of outflows in equities, the 6th straight week of outflows. Friday’s close saw NYSE new highs at 4 while new lows of 485 and the 10-day MA of New High/Low Differential at -628. The percentage of SPX stocks above their 50-MA is 3.2% while those above their 200-MA was 12.2%. NYSI and NASI Summation index both bearish below 8-MA. NYMO McClellan Oscillator closed at -65 and is still oversold. Cumulative AD line is back under the 40 EMA and 89 EMA long term signal in bear mode. CBOE Equity P/C 50-day MA at 0.68 and back to June highs. CNN Fear and Greed index in Extreme Fear zone at 15 from 24 last week.