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Weekly Market View 6-11-23

Weekly Market View 6-11-23

by | Jun 11, 2023 | Weekly Market View

The SPX closed slightly higher this week after an overall narrow range held above its 8 EMA support and hit a new high of 4322 just below the August highs and tagging the 61.8% fib retracement of 4311 but closing underneath Friday. SPX has broken out into a key June OPEX week on deck and some frothy conditions now building as sentiment jumps so it will be worth monitoring how price action unfolds around this 4300 level. A follow through higher can see 4350-75 above while support is at 4250 and would need to hold to prevent a failed breakout attempt at these levels. Rotations between Nasdaq and small caps continue to keep the overall SPX in a more neutral to positive stance and MACD and RSI still in bullish mode so until the market sees a close below the 8 EMA then momentum to the upside likely persists with quarter end nearing in 3 weeks and a potential to see dips get bought through June as many missed the advance.

Market Sentiment/Breadth

AAII sentiment for the week ending 6/7 showed bullish responses rise sharply to 44.5% from 29.1% prior while bearish responses fell to 24.3% from 36.8%. Neutral sentiment fell to 31.2% from 34.1%. This puts optimism above its historical average of 37.5% for the first time since February 2023. Bullish sentiment was last higher on November 11, 2021 (48.0%). The bull-bear spread (bullish minus bearish sentiment) rose to 20.2%, up 28.0 percentage points. The bull-bear spread is at its highest level since November 11, 2021 (24.0%). The NAAIM Exposure index increased to 90.07 from 53.92 and now well above last quarter’s average of 63.74 and the highest levels since January 2022. Lipper fund flows for the week ending 6/7 had $16.1B of outflows in equities, the 4th of 5 weeks seeing outflows. Friday’s close saw NYSE new highs at 70 while new lows of 17 and the 10-day MA of New High/Low Differential is positive now at +25. The percentage of SPX stocks above their 50-MA is 57.2% while those above their 200-MA was 57.4%. NYSI and NASI Summation indexes are both back above 8-MA and in a short term buy signal. NYMO McClellan Oscillator closed at +28 and in a Neutral zone. The cumulative AD line is back over the 40 EMA short term trend and the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.66. CNN Fear and Greed index is into Extreme Greed zone at 77 from 65 last week. VIX/VXV ratio is back down to 6 months lows to 0.815, which measures the spread between 1- and 3-month implied volatility.