The SPX closed nearly unchanged for the week after a mostly bullish advance since the Monday gap down that was overblown and found buyers at key support near 5950 while leading stocks were green most of the week, especially some growth names that reported stellar earnings later in the week. In choppy index markets where breadth is staying bullish and headlines product mostly noise its best to step back and look at the weekly chart which has actually printed 3 straight green candles, and all closed back above the 8-week EMA, the sign of a resilient market. The 3 month range since November is forming a consolidation that likely is becoming a ‘correction through time’. A common occurrence in bull markets that have run up strongly in the prior 6 months and no technical damage or breadth concerns have developed. Instead, breadth has thrusted higher last month off the January 13^th low. Key resistance at 6100 continues to be a sell level until it breaks above on a closing basis with the next target above being 6165, the JPM collar strike. If prices got weaker and broke under 5925 then a retest of the Jan lows near 5775 would be in play. Expanding 52 week highs in single stocks the past week is a positive development and would suggest upside more likely into Feb OPEX.

Market Sentiment/Breadth

AAII sentiment for the week ending 2/5 showed bullish responses fell to 33.3% from 41.0% prior while bearish responses rose to 42.9% from 34.0%. Neutral sentiment fell to 23.8% from 25.0%. The bull-bear spread (bullish minus bearish sentiment) decreased 16.5 percentage points to –9.5%. The bull-bear spread is below its historical average of 6.5% for the fifth time in seven weeks. The NAAIM Exposure index rose to 84.91 from 68.28 last week and is back near last quarter’s Q4 average of 85.81. Total equity fund flows for the week ending 1/29 had $-15.1 billion in outflows in equities. Friday’s close saw NYSE new highs at 89, while new lows of 80 and the 10-day MA of New High/Low Differential is positive at +50. The percentage of SPX stocks above their 50-MA is at 50.6% while those above their 200-MA was 59.4%. NYSI Summation index is still above its 8-MA for a short-term bullish signal. NYMO McClellan Oscillator closed at -2 and is Neutral. The cumulative AD line is above the 40 EMA short term breadth trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA is at 0.54. CNN Fear and Greed index is already in the Fear zone at 39 from 46 last week. The VIX/VXV ratio closed at 0.89. This measures the spread between 1- and 3-month implied volatility, above 1.0 shows fear and can mark a low.