The SPX closed higher for the week by +1.75% after the prior week’s sharp dip held the 21 day EMA perfectly and ending up being a normal retracement after monthly expiration which is common. This week the market also showed great resiliency, closing higher than its opening price all five days of the week, especially on Tuesday’s gap down to support at 5875 on geopolitical tensions and immediately seeing buyers step in and drive prices higher. The Russell small caps led the week with a stellar +4.7% return. Sectors that led the week included Materials, Utilities and Energy while all groups were overall positive on the week and even saw Tech and Discretionary up +2.2% with Software a clear leader being up +5% on the week. The SPX now is back over its key 8 day EMA at 5935 and in positive gamma again heading into this holiday week that tends to see volatility contract lower in the VIX which should see small daily price ranges in the indices and a tailwind to the upside for stocks. SPX has first resistance at the 6000 round number which should be a target early in the week while a close above can now start to see a push to the often-watched JPM collar strike which sits at 6055 SPX for the quarterly expiration next month. Support below now rises to 5900 which is value area high for the year and if prices can sustain above this level and recent retest of key levels then no reason to think prices can’t see new highs into month end as November has been a fantastic month as expected seasonality wise.

Market Sentiment/Breadth

AAII sentiment for the week ending 11/20 showed bullish responses fall to 41.3% from 49.8% prior while bearish responses rose to 33.2% from 28.3%. Neutral sentiment rose to 25.5% from 21.8%. The bull-bear spread (bullish minus bearish sentiment) decreased 13.4 percentage points to 8.1%. The bull-bear spread is above its historical average of 6.5% for the 28th time in 29 weeks. The NAAIM Exposure index was nearly unchanged to 91.33 from 91.60 last week and is above last quarter’s average of 80.82 but still not extreme like back in July when it was near 105. Total equity fund flows for the week ending 11/13 had $-7.8 billion in outflows in equities. Friday’s close saw NYSE new highs at 284, while new lows of 26 and the 10-day MA of New High/Low Differential is positive at +130. The percentage of SPX stocks above their 50-MA is at 63.2% while those above their 200-MA was 72.2%. NYSI Summation index is below its 8-MA but curling higher for a potential bull cross but still a short-term bearish signal. NYMO McClellan Oscillator closed at +26 and is Neutral. The cumulative AD line tested and bounced higher off the 40 EMA short term breadth trend and still above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA is at 0.56 and new lows for this year. CNN Fear and Greed index is in the Greed zone at 61 from 51 last week. The VIX/VXV ratio closed at 0.88. This measures the spread between 1- and 3-month implied volatility, above 1.0 shows fear and can mark a low.