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Weekly Market View 4-28-24

Weekly Market View 4-28-24

by | Apr 28, 2024 | Weekly Market View

The SPX closed higher for the week by +2.6% after we expected last Friday’s OPEX low to be a short-term bottom and see what kind of rebound the market could muster. The bounce has reached the ideal resistance target of nearly 5100 SPX while this lines up with around 510 on SPY. The 50% retracement of the decline comes in at this current point of 509.24 while the 61.8% Fibonacci retracement is at 512.86 and would be a clear line in sand level into this catalyst heavy week that will conclude April and begin the month of May. The FOMC midweek will surely be a focal point and could see any move into and after the event be reversed in the days after, which is common price action into FOMC weeks. For now, the SPX has used up a lot of fuel to just bounce back to stiff resistance with VIX easing back to the 15 level. Breadth metrics such as the NYSI and New Highs continue to show sluggishness and the added pressure of bonds and rates could weigh further on the stock market. As this week saw, the market can quickly gap down from current resistance as Thursday showed but the 5000-5100 expected range has held as consolidation unfolds. The volume profile below on SPY can clearly see larger volume resistance in the 512-513 range so that would be a likely failure point for a rollover back down in this ongoing correction that could eventually take out the 494 recent lows. This weeks low may not have been held on Thursday if it were not for strong earnings out of MSFT and GOOGL saving the Nasdaq but also in the process potentially trapping new bulls. Headline risk remains high based on the elevated weekly options expected moves and while support is clear at 5000, the resistance just above at 5125-5150 SPX still needs to be cleared for confidence.

Market Sentiment/Breadth

AAII sentiment for the week ending 4/24 showed bullish responses fall to 32.1% from 38.3% prior while bearish responses moved to 33.9% from 34.0%. Neutral sentiment rose to 33.9% from 27.8%. The bull-bear spread (bullish minus bearish sentiment) decreased 6.1 percentage points to –1.8%. The bull-bear spread is below its historical average of 6.5% for the second time in 25 weeks. The NAAIM Exposure index decreased to 59.48 from 62.98 last week and is below last quarter’s average of 87.84. Total equity fund flows for the week ending 4/17 had $-12.8 billion of outflows in equities. Friday’s close saw NYSE new highs at 81 while new lows of 22 and the 10-day MA of New High/Low Differential is negative at -18. The percentage of SPX stocks above their 50-MA is at 45.8% while those above their 200-MA was 74.2%. NYSI Summation index is below its 8-MA for a short term sell signal. NYMO McClellan Oscillator closed at 0 and now back to Neutral. The cumulative AD line bounced this week and is right at the 40 EMA short term breadth trend while still above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.65. CNN Fear and Greed index is in the Fear zone at 42 from 31 last week. The VIX/VXV ratio closed at 0.924. This measures the spread between 1- and 3-month implied volatility, above 1.0 exhibits fear and tends to mark a low.