The S&P 500 (SPX) bounced back last week after pulling back to key support and now sitting just under new all-time highs.  We consolidated for most of the week in a narrow range above the rising 8- and 21-EMA as short-term momentum shifts back to the bulls and now looking for the confirmatory push back to new highs. Overall, the path of least resistance now is to the upside and the top of monthly value is at 4708.50 and a breakout move on early watch for the week. Momentum starting to pick up as well with both MACD and RSI starting to turn higher after resetting during the latest pullback. A move above 4740.50 has room to run to 4757.25 and then 4790.25. The 8-EMA is supportive at 4652 and key line in the sand for short-term momentum. A breakdown can re-test 4628.50, 4610.50 and then 4591.

Market Sentiment/Breadth

AAII sentiment for the week ending 12/8 showed bullish responses up to 29.7% vs 26.7% prior while bearish responses fell sharply to 30.5% from 42.4%. Neutral sentiment jumped to 39.8% from 31%, the highest level is almost two years. NAAIM Exposure fell again to 69.46 and its lowest mark since mid-October. A move under 60 is considered an extreme and certainly nearing that level of sentiment. Lipper Fund flows for the week ending 12/8 showed $1.5B in outflows from equities. As of Friday’s close we had 134 new highs vs 186 new lows, balanced breadth. On the NYSE, New Highs minus New Lows was -17, far better than the -180 print the prior week. The percentage of stocks above their 50-day MA was 39.6% and remains below average while those above their 200-day was 50.54 and remains weak. NYMO jumped off of extreme oversold levels for the week back up to +16 and closed at -10.29, a neutral reading. Both NYSI and NASI flattened out a bit but remains below their respective 8-EMA. CBOE Equity P/C 50-day MA remains subdued at 0.471. CNN Fear and Greed was 38, up from 20 last week, but remains ‘fear.’