Weekly Market View 6-21-22
The SPX fell 6% on the week with the post FOMC day rally being faded after Wednesday tested up to 3840 but was unable to trade into the gap overhead into 3900. Prices attempted a Friday OPEX rally with growth names stronger to close the week, but the SPX closed back under 3700. With stocks now very oversold and Quad Witching expiration passing, it opens a retracement rally potential but Fridays high at 3710 will be the key level to see buyers get above early next week. The 8 EMA sits at 3807 and 21 EMA further higher at 3939 as upside targets along with the gap fill near 3900. The trend is clearly lower with MACD in a bear cross position but RSI and breadth indicators near very oversold levels can materialize in a snapback rebound. The QQQ Nasdaq also closed the week just under a very long-term level of support in the 200-week EMA so the 275 level will be important to watch for reversal attempts off this key support.
AAII sentiment for the week ending 6/15 showed bullish responses drop to 19.4% from 21% prior while bearish responses rose to 58.3% from 46.9%. Neutral sentiment fell to 22.2% from 32.1%. The drop puts optimism at a seven-week low. Bullish sentiment is below its historical average of 38.0% for the 30th consecutive week and at an unusually low level for the 17th time in 21 weeks. NAAIM Exposure fell sharply to 32.18 and is in bearish sentiment. Lipper fund flows for the week ending 6/15 had $16.2M of outflows of equities. Friday’s close saw NYSE new highs at just 2 while new lows of 566, bearish breadth to end the week. The percentage of SPX stocks above their 50-MA is 2% while those above their 200-MA was 12.8% and a new low for this year showing extreme oversold conditions. NYSI and NASI Summation index both pointing down and below the 8-MA. NYMO dropped to -49.9 to end the week in oversold territory. Cumulative AD remaining in a downtrend below the 40 EMA short term and 89 EMA long term. CBOE Equity P/C 50-day MA at 0.67 and at very high levels. CNN Fear and Greed in Extreme Fear zone at 14 from 28 last week.