The SPX closed lower by about -1% on the week after a volatile range expanded to the downside and cracked the expected move for the week before rebounding somewhat Friday to close right near the key 5200 level. This line in sand will be a good spot to assess market risk into the coming week with any further selling below likely to retest the Thursday low at 5146. Even with the Friday dead cat bounce the market breadth did not impress and VIX was green late in the day as a potential red flag. RSI hit a 5-month low also this week which is another sign of momentum running out of fuel along with the late week sell signal from the NYSI summation index. If the SPX has trouble regaining 5250 then odds are likely it retreats back lower to last week’s low and a close under 5150 should see a swift decline to the rising 55-day MA at 5055 currently. Market gamma would get more negative on a move below 5100 which could make a magnet for the larger round number zone of 5000 to be a target at some point in April if the selling sustains. This level would be healthy to retest as it is near YTD VWAP, currently at 498 on the SPY. MACD has also crossed lower on the daily SPX while the Nasdaq QQQ has even seen momentum slip on the weekly timeframe with a bear cross on the MACD. QQQ has strong support at the 415 level if a decline pushed prices down to that volume pocket for the Tech index.

Market Sentiment/Breadth

AAII sentiment for the week ending 4/3 showed bullish responses fall to 47.3% from 50.0% prior while bearish responses decreased to 22.2% from 22.4%. Neutral sentiment rose to 30.5% from 27.6%. The bull-bear spread (bullish minus bearish sentiment) decreased 2.5 percentage points to 25.1%. The bull-bear spread is above its historical average of 6.5% for the 22nd consecutive week. The NAAIM Exposure index decreased to 84.24 from 103.88 last week and is near last quarter’s average of 87.84. Total equity fund flows for the week ending 3/27 had $-19.5 billion of outflows in equities. Friday’s close saw NYSE new highs at 104 while new lows of 31 and the 10-day MA of New High/Low Differential is still positive at +171. The percentage of SPX stocks above their 50-MA is at 72.8% while those above their 200-MA was 78.6%. NYSI Summation index crossed below its 8-MA for a short term sell signal. NYMO McClellan Oscillator closed at -25 and Neutral. The cumulative AD line increased this week and is still above the 40 EMA short term breadth and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.63. CNN Fear and Greed index is in the Greed zone at 61 from 71 last week. The VIX/VXV ratio closed at 0.933. This measures the spread between 1- and 3-month implied volatility, above 1.0 exhibits fear and tends to mark a low.