Weekly Market View 5-29-22
The S&P (SPX) rose 6.5% last week, the best single week performance since November 2020, and reprieve after intense selling pressure over the last two months. The S&P is forming a broader megaphone pattern as well off the January highs which measures up to 4400. We held VWAP from the March 2020 lows for the third straight week and now both the 8- and 21-EMA curling higher with short-term momentum for the bulls. Longer-term support remains at the 3905-3835 zone below while 4000 will likely see a response on first test. The quick run higher is now running into notable resistance from the prior range breakdown at 4200-4155. This also aligns with the 55-MA while the 4275-4300 range above is also notable. VWAP for the year is at 4356.
AAII sentiment for the week ending 5/25 showed bullish responses down to 19.8% from 26% prior while bearish responses rose to 53.5% from 50.4%. Neutral sentiment rose to 26.7% from 23.6%. This is the fourth time in the last two months that optimism fell below 20%. NAAIM Exposure rebounded to 33.19 this week which is up from 19.51 last week which was an extreme low. Lipper Fund flows for the week ending 5/25 had $5.2B of inflows to equities, a rare inflow for equities in the last two months. As of Friday’s close we had 160 new highs vs 95 new lows, much more moderate breadth. The percentage of stocks above their 50-MA was 32.9% while those above their 200-day was 22.5%, better than recent weakness. NYSI and NASI both put in strong weeks and firmly above their 8-EMA in a bullish signal. NYMO surged to 105.91 on Friday, the highest since June 2020. Cumulative AD remains in a bearish signal and CBOE Equity P/C 50-day MA remains neutral. CNN Fear and Greed rose to 21 and up from 11 last week.