Weekly Market View 4-30-2023
The SPX had a wild week starting with the small but sharp post OPEX week pullback to support at the rising 55 day EMA support which held at 4050 and resulted in a strong close to the week back positive and at highs near 4170. The ascending triangle pattern on the index is forming nicely the past 6 months and with RSI potentially ready to break above its trendline that should lead the SPX to break through 4200 on the upside but still lots of resistance exists just above at 4225-4250 from the August highs so likely to be more of a two steps up and one step down market still. With certain sectors stronger than others it’s a stock picker trading market but the Nasdaq continues to show impressive leadership. Support on SPX is at 4125 and then the 21 EMA at 4100 currently and MACD nearing a bull cross again.
AAII sentiment for the week ending 4/26 showed bullish responses fall to 24.1% from 27.2% prior while bearish responses rose to 38.5% from 35.1%. Neutral sentiment fell to 37.4% from 37.7%. Pessimism among individual investors stayed above average for the 10th consecutive week. The bull-bear spread (bullish minus bearish sentiment) decreased 6.5 percentage points to –14.4%. The bull-bear spread is at an unusually low level for the seventh week out of the last 10 weeks. The NAAIM Exposure index decreased sharply to 50.81 from 78.26 and is back below last quarter’s average of 63.74. Lipper fund flows for the week ending 4/26 had $2B of outflows in equities. Friday’s close saw NYSE new highs at 72 while new lows of 37 and the 10-day MA of New High/Low Differential is positive still at +2. The percentage of SPX stocks above their 50-MA is at 58.2% while those above their 200-MA was 58.6%. NYSI and NASI Summation indexes are below their 8-MA after the cross but started to already curl higher with the strong bounce and could regain into a short term buy signal. NYMO McClellan Oscillator closed at +11 after the sharp drop to -45 and back to a Neutral zone. The cumulative AD line still is above the 40 EMA short term trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.69. CNN Fear and Greed index is in Greed zone at 60 from 63 last week. VIX/VXV ratio is back down to 6 months lows to 0.808, which measures the spread between 1- and 3-month implied volatility.