Weekly Market View 7-11-22
The SPX closed the week higher and pinned right at 3900 after regaining the 8/21 EMA’s on a closing basis for two consecutive days. The Nasdaq led the advance as tech growth names showed outperformance and the QQQ index got above its late June highs slightly. The S&P will need to stay above the 3850-level short term which is roughly the 21-EMA support and now potential to see follow through up to the key 4000 round number level near the 55-EMA into the July monthly expiration. Also, this week’s low near 3750 becomes a spot to hold on the pullbacks as it potentially has created the first higher low in quite some time. RSI got above a key trendline from the March highs and perhaps showing a leading signal as the SPX tries to near 4k. MACD continues to slope higher after the bullish cross recently.
AAII sentiment for the week ending 7/6 showed bullish responses drop to 19.4% from 22.8% prior while bearish responses rose to 52.8% from 46.7%. Neutral sentiment fell to 27.8% from 30.5%. The percentage of individual investors expecting stocks to decline further is above 50% for the seventh time in 11 weeks. The latest AAII Sentiment Survey also shows both optimism and neutral sentiment falling. NAAIM Exposure fell slightly to 27.85 and still in bearish sentiment. Lipper fund flows for the week ending 7/6 had $7.9B of outflows of equities. The 4th straight week of outflows of at least -$5B. Friday’s close saw NYSE new highs at 7 while new lows of 56 and a 30-day MA of New High/Low Differential at -194. Bearish breadth continues but improving. The percentage of SPX stocks above their 50-MA is 28.4% while those above their 200-MA was 23.4%. NYSI and NASI Summation index both above the 8-MA and continue to slope higher. NYMO fell to 26 to end the week neutral. 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 0.68 and at very high levels showing extreme pessimism. CNN Fear and Greed in Fear zone at 30 from 24 last week.