The SPX closed the week higher by +2.4% and just above the large 4500 resistance level that acted like a pin Friday to pull prices back from highs made at 4527 after a strong rally led by early week breadth signals that pointed to upside. The market now nearing frothy levels into a crucial time of month, the July options expiration week and the mid-month point that tends to see seasonal strength fade as earnings season arrives and the next FOMC meeting just two weeks away. Resistance is still at 4525-4550 with 78.6% fib retracement of the entire bear market at 4535. If the market reaches higher then 4600 is the next logical level based on the August 2022 peak. Support is below at the 8 EMA of 4460 while the open gap below comes in at 4440 and then the 21 EMA currently at 4406 while the 4400 round number likely is strong support on a first retest. SPX is getting somewhat extended from its 200-day MA now way down at 4030 with the QQQ Nasdaq even more stretched from its 200 MA by about 25% now.

Market Sentiment/Breadth

AAII sentiment for the week ending 7/12 showed bullish responses fell to 41.0% from 46.4% prior while bearish responses rose to 25.9% from 24.5%. Neutral sentiment rose to 33.1% from 29.1%. The bull-bear spread (bullish minus bearish sentiment) decreased 6.8 percentage points to 15.1%. The bull-bear spread is above its historical average of 6.4% for the sixth consecutive week. The NAAIM Exposure index increased to 93.34 from 83.11 now the highest level since November 2021 and is above last quarter’s average of 70.22. Lipper fund flows for the week ending 7/12 had $1.0B of inflows in equities, the 4^th week of inflows in the last 5 weeks. Friday’s close saw NYSE new highs at 112 while new lows of 24 and the 10-day MA of New High/Low Differential is positive at +101. The percentage of SPX stocks above their 50-MA is 83.2% while those above their 200-MA was 69.8%. NYSI Summation index is above 8-EMA and in a short term buy signal. NYMO McClellan Oscillator closed at +31.1 after touching +70 during the week and still in a Neutral zone. The cumulative AD line is above the 40 EMA short term breadth trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.59. CNN Fear and Greed index is in Extreme Greed zone at 80 from 78 last week. VIX/VXV ratio is 0.832, which measures the spread between 1- and 3-month implied volatility, and under 0.80 shows market complacency while above 1.0 is panic and fear.