The SPX closed the week down about -1% but rallied well off the midweek lows to close Friday back above the 21 EMA just slightly. A crucial level for stabilization in the market as bad news continues to see dip buyers emerge and keep prices above the 3750 large support that has been holding the past month. The gap and go higher on Friday created a volume pocket below 3825 if things were to reverse lower and then the week’s lows become a focus. On the upside the 55 EMA continues to come down towards price and now at 3975 so any follow through rally would likely find major resistance in that area up towards the round number of 4000. Overall MACD is still in positive territory and RSI is right at the neutral 50 level but holding up well and potentially signaling a higher high. Since the March highs the market has been stair stepping lower in an orderly channel so watching the top of the channel should be key from here.

Market Sentiment/Breadth

AAII sentiment for the week ending 7/13 showed bullish responses rise to 26.9% from 19.4% prior while bearish responses fell to 46.5% from 52.8%. Neutral sentiment fell to 26.6% from 27.8%. Optimism among individual investors about the short-term direction of the stock market rebounded to a six-week high, though continues to be unusually low. The latest AAII Sentiment Survey also shows drops in neutral and bearish sentiment. NAAIM Exposure fell slightly to 26.74 and still in bearish sentiment showing active manager underexposed. Lipper fund flows for the week ending 7/13 had $3.1B of outflows of equities. The 5^th straight week of outflows. Friday’s close saw NYSE new highs at 9 while new lows of 90 and the 10-day MA of New High/Low Differential at -171. Bearish breadth continues but improving. The percentage of SPX stocks above their 50-MA is 28.6% while those above their 200-MA was 19.8%. NYSI and NASI Summation index both testing the 8-MA and continue to slope higher. NYMO closed at 13 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 27 from 29 last week.