The SPX closed higher for the week by +1% into new all time highs, hitting 6100 while the Nasdaq tech names led the move with the QQQ adding over +3.3% on the week. The market continues to defy the bears and with larger forces at play going into year end with a market that is already up 25% for the calendar year and flows aggressively coming in on any dips should keep a bid under this market into the seasonal holiday timeframe. Although the upside might be limited this week with it being the week prior to triple witching OPEX it often can be a stalling out or time of month to see a minor pullback so potential to at least come back into test the rising 8 EMA, currently at 6050 and would line up with that small open gap that may want to get filled from last week. The Dec OPEX coming the following week is a large one that tends to show upside bias and with the current price action now in melt up mode it can continue that theme of chasing highs and the running of the meme type stocks that we are starting to see accelerate with moves in higher beta stocks. The 6180 level in the SPX could be an interesting upside target from simply based on the fact its derived from the golden ratio of 61.8 being a Fibonacci number. Support on a break of 6050 would likely move swiftly to the large 6000 round number level that likely is now a strong floor into year end as volatility continues to shrink. The main risk at this point would be ‘jump risk’ that simply means the VIX has gotten to a rock-bottom floor, although can stay in the 12-13 range for a while, any unforeseen headlines or econ data prints could spark a sharper dip from these levels but that may be more a story for January once the calendar flips.

Market Sentiment/Breadth

AAII sentiment for the week ending 12/4 showed bullish responses jump to 48.3% from 37.1% prior while bearish responses fell to 30.7% from 38.6%. Neutral sentiment fell to 21.0% from 24.3%. The bull-bear spread (bullish minus bearish sentiment) increased 19.3 percentage points to 17.7%. (It fell to –1.6% last week.) The bull-bear spread is above its historical average of 6.5% for the 29th time in 31 weeks. The NAAIM Exposure index fell to 85.49 from 98.93 last week and is just above last quarter’s average of 80.82. Total equity fund flows for the week ending 11/26 had $-14.4 billion in outflows in equities. Friday’s close saw NYSE new highs at 128, while new lows of 58 and the 10-day MA of New High/Low Differential is positive at +166. The percentage of SPX stocks above their 50-MA is at 58.4% while those above their 200-MA was 71.2%. NYSI Summation index is above its 8-MA for a short-term bullish signal. NYMO McClellan Oscillator closed at -10 and is Neutral. The cumulative AD line is near new highs and is above 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 lows for this year. CNN Fear and Greed index is in the Neutral zone at 53 from 66 last week. The VIX/VXV ratio closed at 0.78 and new lows for the year perhaps showing complacency. This measures the spread between 1- and 3-month implied volatility, above 1.0 shows fear and can mark a low.