The SPX closed higher for the week by +2.3% after a strong blowoff type move after the FOMC statement that saw a spike in 52-week highs on the NYSE, the highest in nearly 3 years. Often a signal of strong market health longer term but a short-term exhaustion clue. With just 4 trading days into the end of the first quarter the SPX could take a stab at a melt up towards the next key strike price of 5300 as an upper target with that level just about 60 points away and this lines up with the weekly options expected move which is +/- 54 points. Any pullback from here or into early April would then see first support at the 8-day EMA of 5193 and then the 21 EMA at 5135. It continues to be a low correlation market with measures of single stock correlation near one-year lows which fuels the current dispersion trade of single stocks doing what they want without any real impact on the overall indices. This can sometimes be a sign of complacency but also can last longer than most think. For now, any sign of weakness would have to first see a close below the 8 EMA and then a close under the low of the current high weekly candle. As Q2 of 2024 nears, it should at least be worth noting weaker seasonality typically in late April and May and the recent move higher in yields and now the US dollar breakout.

Market Sentiment/Breadth

AAII sentiment for the week ending 3/20 showed bullish responses fell to 43.2% from 45.9% prior while bearish responses increased to 27.2% from 21.9%. Neutral sentiment fell to 29.6% from 32.2%. The bull-bear spread (bullish minus bearish sentiment) decreased 8.0 percentage points to 16.0%. The bull-bear spread is above its historical average of 6.5% for the 20th consecutive week. The NAAIM Exposure index decreased to 93.22 from 104.75 last week but the reading came midweek prior to the big post FOMC rally and is still well above last quarter’s average of 67.81. Total equity fund flows for the week ending 3/13 had $-6.9 billion of outflows in equities. Friday’s close saw NYSE new highs at 234 while new lows of 20 and the 10-day MA of New High/Low Differential is still positive at +180. The percentage of SPX stocks above their 50-MA is at 76.8% while those above their 200-MA was 80.8%. NYSI Summation index remains above its 8-MA for a short term buy signal. NYMO McClellan Oscillator closed at +11 and Neutral. The cumulative AD line increased this week and is still well above the 40 EMA short term breadth and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.64. CNN Fear and Greed index is in the Greed zone at 72 from 72 last week. The VIX/VXV ratio closed at 0.854. This measures the spread between 1- and 3-month implied volatility, above 1.0 exhibits fear and tends to mark a low.