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Weekly Market View 2-19-24

Weekly Market View 2-19-24

by | Feb 18, 2024 | Weekly Market View

The SPX closed lower for the week by -0.3% after recovering the steep selloff on Tuesday to nearly finish unchanged on the week. Overall, the options expiration for February may have support the markets more than otherwise may have been seen and now with seasonally weaker trends into the end of February, the market will need to see breadth improve to sustain prices above these lofty levels of 5000. Holding above that level can see rotation back up to highs and the 5050 mark a key upper resistance currently based on the months high so far and a lot of gamma related resistance. Any post OPEX pullback into months end can see the 21 EMA first as a support lower at 4936 currently with the 4900 level a critical downside line in sand that would invite higher levels of volatility into the market if cracked below. RSI continues to see some negative divergence as a lower high is evident and MACD showing signs of starting to fade but a lot of this week will be determined by the Tech sector and Nasdaq chip stocks, namely NVDA who reports earnings and likely will guide the path of risk appetite after its earnings report. A larger support in the SPX on stronger selling could see 4800 come into play the next month as a level where the 55 day EMA sits and lines up with the prior breakout in Jan.

Market Sentiment/Breadth

AAII sentiment for the week ending 2/14 showed bullish response fall to 42.2% from 49.0% prior while bearish responses increased to 26.8% from 22.6%. Neutral sentiment rose to 31.1% from 28.4%. The bull-bear spread (bullish minus bearish sentiment) decreased 11.1 percentage points to 15.4%. The bull-bear spread remains above its historical average of 6.5% for the 15th consecutive week. The NAAIM Exposure index increased to 95.58 from 93.77 last week and above last quarter’s average of 67.81. Total equity fund flows for the week ending 2/7 had $-10.4 billion of outflows in equities. Friday’s close saw NYSE new highs at 199 while new lows of 15 and the 10-day MA of New High/Low Differential is still positive at +117. The percentage of SPX stocks above their 50-MA is at 61.2% while those above their 200-MA was 71.0%. NYSI Summation index remains choppy but crossed back above its 8-MA for a short term buy signal. NYMO McClellan Oscillator closed at +14 and Neutral. The cumulative AD line increased this week and is above the 40 EMA short term breadth and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.66. CNN Fear and Greed index is in the Extreme Greed zone at 77 from 78 last week. The VIX/VXV ratio closed at 0.898. This measures the spread between 1- and 3-month implied volatility, above 1.0 exhibits fear and tends to mark a low.