The S&P 500 (SPX) closed modestly higher last week after a wild, holiday-shortened week that saw us dip down to the lowest level since May 2021. We’ve been trading in a wide channel lower since the January highs and hit the channel bottom on Thursday morning, trading below the YTD value area which brought in strong responsive buying that brought back into range. A move higher back into the channel high would target further near-term upside to 4435. The next notable area of interest is 4492.5 which aligns with the November lows and the February VPOC. Momentum is starting to turn a bit as well with RSI out of a small pullback trend and MACD with a bullish cross and plenty of room to run off of oversold levels. A move lower has support at 4250 and then the 2/24 range has two notable high-volume nodes at 4166.75 and then 4137.50.

Market Sentiment/Breadth

AAII Sentiment for the week ending 2/23 saw bullish responses rise to 23.4% vs 19.2% prior and neutral sentiment fall to 22.9% from 37.6%. Bearish responses rose to 53.7% from 43.2%, close to a 9-year high while optimism remain well below historical levels. NAAIM Exposure fell to 44.41 from 53.49 prior and below 45 for the first time since May 2021. Lipper Fund flows had $254M of inflows to equities and the third week of positive flows. As of Friday’s close we had 88 new highs versus 122 new lows, much more moderate breadth than in the past two weeks. The percentage of stocks above their 50-MA was 29.6% while those above their 200-day was 27.8%. NYSE Summation remains muted at -724.39 and below its 8-EMA while NASI is back below its 8-EMA after crossing under this week. Cumulative AD remains in a bear trend. NYMO was -34.19, a neutral reading. CBOE Equity P/C 50-day MA was 0.67, a neutral reading. CNN Fear and Greed was 31 and down from 39 prior.