Weekly Market View 11-12-23
The SPX closed higher on the week by another +1.3% and all the move coming Friday after a largely sideways range most of the week held firmly above 4350 and grinded higher on any real dip as many participants have missed the move and will now likely be eager to take advantage of the smallest of retracements as price holds above 8 EMA. The SPY chart below shows the move this week pierced the high-volume shelf of resistance near 435 and an impressive close for the week right at the trendline from the July highs, while RSI has already clearly broken above that trendline, suggesting price action will do the same. Now with the 21/55 EMA bull cross nearing its confirming medium-term momentum shifting higher and a very real chance to see the 4500 round number tested into the Thanksgiving holiday week in two weeks as volatility subsides and after this weeks CPI/PPI data points there starts to become a lull in the macro news flow. The SPY has strong support at 435 while the 21 EMA at 430 would be a possible retest at some point. With VIX expiration on Wednesday this week and then monthly stock options expiration Friday coming it may offer an opportunity to lighten up on longer into an early week pop and then wait for a post-OPEX dip to redeploy capital.
Market Sentiment/Breadth
AAII sentiment for the week ending 11/8 showed bullish responses increased to 42.6% from 24.3% prior while bearish responses fell sharply to 27.2% from 50.3%. Neutral sentiment rose to 30.2% from 25.4%. This week’s increase was the largest since July 15, 2010 (an 18.4-percentage-point jump), and the 23rd largest week-over-week increase in bullish sentiment in the survey’s history. The bull-bear spread (bullish minus bearish sentiment) increased 41.4 percentage points to 15.4%. The bull-bear spread is above its historical average of 6.4% for the second time in 10 weeks. The NAAIM Exposure index increased to 61.76 from 29.17 and now back near last quarter’s average of 60.53. Equity fund flows for the week ending 11/8 had $-8.4 billion of outflows in equities. Friday’s close saw NYSE new highs at 44 while new lows of 105 and the 10-day MA of New High/Low Differential is negative at -22 but nearing a positive cross. The percentage of SPX stocks above their 50-MA is 49.4% after lows of 10% last month at the bottom while those above their 200-MA was 41.4%. NYSI Summation index is above its 8-MA for a short term buy signal. NYMO McClellan Oscillator closed at +34 and back to Neutral. The cumulative AD line crossed above the 40 EMA short term breadth and still slightly below the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.79. CNN Fear and Greed index is in the Fear zone at 42 from 39 last week. The VIX/VXV ratio closed at 0.858 after peaking near 0.96. This measures the spread between 1- and 3-month implied volatility, above 1.0 exhibits fear and tends to mark a low.