Weekly Market View 7-25-21
The S&P 500 (SPX) put in a bullish engulfing week after testing the 50-MA and bouncing back to new all-time highs. The pullback that started on 7/14 ended up being around 3.5%, the biggest dip of 2021, and larger timeframe buyers stepped in with force driving the action higher. Momentum is shifting back a bit towards the bulls also with MACD nearing a crossover and RSI back above 60. The current range breakout has room to run with a measured move up at 4480. The recent move has been swift and now back at resistance of a multi-month channel off of the May and June lows, does create potential for a pullback early in the week. The 8- and 21-day MA are both sloping higher and supportive down around 4350. That also aligns with June VPOC.
AAII Sentiment for the week ending 7/21 showed another fall in bullish responses to 30.6% from 36.2% and bearish sentiment rose to 30.6% from 26.8%. Bearish sentiment is now above the long-term average for the first time in 24 weeks. NAAIM Exposure fell to 71.04 from 93.27. Lipper Fund flows had $8.8B in outflows from equities, the largest single week since January. As of Friday’s close, there were 509 new highs vs 179 new lows. The percentage of stocks above their 50-MA rose slightly to 41.7% while those above the 200-day rose to 64.6%, both still showing negative divergence with the S&P hitting new highs. NYSE Summation continues to fall, hitting 159.96, in a sign of weak breadth as remains well below its 8-EMA, a bearish sign. Cumulative AD remains below its 50-MA in a sign of weakness. NYMO hit a big extreme on Monday at -89.77 and bounced back throughout the week to -17.88, some room for expansion higher but not nearly the pent up demand as earlier this week. CNN Fear and Greed rose slightly to 32.