The S&P 500 (SPX) closed lower for the sixth straight week – the first such instance since May/June 2011 – as concerns over growth, high inflation, and the Fed continue to weigh on sentiment. Since 1980 there have been thirteen weekly losing streaks of six weeks or more and the average four-week returns afterwards have been 4.15%. The weekly candle put in a long tail with strength on Thursday and Friday off the 3900 level and channel bottom from the recent highs. The longer timeframe broke down out of balance to start the week and a move higher runs into significant resistance from that range. The 8-EMA is just above Friday’s high and a move above can shift the near-term trend higher with upside to the 21-EMA at 4165 while the mid-point of the channel is at 4175. If we do get a 4% move off this recent losing streak that would be near 4185.  Failure to follow-through back up to this zone creates two scenarios: first, we chop between the 4100 and 3950 zone and former a smaller balance; or two, we reverse through last week’s lows and move back towards 3800. The 3950-3900 zone will be important support to hold in the week. Momentum is showing signs of inflecting higher with MACD improving and RSI near a downtrend break.

Market Sentiment/Breadth

AAII sentiment for the week ending 5/11 saw bullish responses fall to 24.3% from 26.9% prior while the bearish responses fell to 49% from 52.9%. Neutral sentiment rose to 26.6% from 20%. NAAIM Exposure dropped again to 24.31 from 31.76 and now at its lowest level since the pandemic lows in 2020. Lipper Fund flows had $8.6B in outflows from stocks, the sixth straight week of losses. As of Friday’s close there were 25 new highs versus 352 new lows, continuing to be weak overall but not as bad as prior weeks. NYSI closed at -856 and NASI closed at -1116 and both remain in a bearish trend below the 8-EMA. Cumulative AD closed slightly higher on Friday but remains overall in a bearish trend. NYMO closed at -12.56 on Friday after hitting an extreme this week at -68. VIX:VXV ratio is at 0.96, a neutral reading. CNN Fear and Greed is at 12, down from 16 a week prior, and remains in ‘extreme fear.’