The SPX had a choppy week with early selling resulting yet again with dip buyers off key support at the 4050 level which lines up with the rising 55-day EMA. The market is more or less in a range until the 4000-4200 zone is broken but energy is building, and the Nasdaq seems to be leading the market higher while the Russell small caps struggle but Fridays advance showed some potential in the weak Banks and Energy names so potential now for a bit more broad based participation. However, with breadth still in a sell signal it pays to be patient until a close above 4175 is confirmed or focus on the leading sectors of Tech. SPX has strong resistance at 4100 and then 4225 but a move above can see 4300 as the target while support is seen at 4100 and 4050. A stronger support zone is at 3925-3950 where the 200-day MA sits.

Market Sentiment/Breadth

AAII sentiment for the week ending 5/3 showed bullish responses unchanged at 24.1% from 24.1% prior while bearish responses rose to 44.9% from 38.5%. Neutral sentiment fell to 31.0% from 37.4%. Bearish sentiment, expectations that stock prices will fall over the next six months, jumped 6.4 percentage points to 44.9%. Bearish sentiment is still above its historical average of 31.0% for the 71st time out of the past 76 weeks. The bull-bear spread (bullish minus bearish sentiment) decreased 6.4 percentage points to –20.8%. The bull-bear spread remains at an unusually low level for the eighth time out of the last 11 weeks. The NAAIM Exposure index increased to 67.01 from 50.81 and is back above last quarter’s average of 63.74. Lipper fund flows for the week ending 5/3 had $14.0B of outflows in equities. Friday’s close saw NYSE new highs at 48 while new lows of 49 and the 10-day MA of New High/Low Differential is at -41. The percentage of SPX stocks above their 50-MA is at 52.8% while those above their 200-MA was 52.0%. NYSI and NASI Summation indexes are still below their 8-MA and in a short term sell signal. NYMO McClellan Oscillator closed at -13 and in a Neutral zone. The cumulative AD line is chopping around the 40 EMA short term trend and back above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.71. CNN Fear and Greed index is in Greed zone at 59 from 60 last week. VIX/VXV ratio is back down to 6 months lows to 0.827, which measures the spread between 1- and 3-month implied volatility.