The SPX closed the week lower by back above the 3800 key level short term. With Fridays move higher back to the 8 EMA a potential higher low is trying to form but will need to confirm with a close above the 21 EMA next week and preferably a higher high above 3950. The SPX continues to see a stairstep lower from each test of the 21 EMA sloping lower although the bull MACD cross signal recently still in place so a short covering rally higher is not out of the question. Most rebounds should be short term and likely sold into as long as price maintains under the 4000 level which is near the 55-day EMA. This week’s low near 3740 becomes a key level to hold on the downside to avoid a move to new lows in July. RSI staying closer to the 50 level and showed some bull divergence on the recent June lows with price.

Market Sentiment/Breadth

AAII sentiment for the week ending 6/29 showed bullish responses rise to 22.8% from 18.2% prior while bearish responses fell to 46.7% from 59.3%. Neutral sentiment rose to 30.5% from 22.5%. Pessimism among individual investors plunged this week but remains at an unusually high level in the latest survey. Additionally, both bullish and neutral sentiment rose. NAAIM Exposure rose slightly to 30.66 but is still in bearish sentiment. Lipper fund flows for the week ending 6/29 had $8.0B of outflows of equities. The third straight week of outflows of at least -$5B. Friday’s close saw NYSE new highs at 12 while new lows of 205, bearish breadth continues. The percentage of SPX stocks above their 50-MA is 24.2% while those above their 200-MA was 25.8%. NYSI and NASI Summation index both above the 8-MA but starting to weaken and roll over. NYMO fell to -7 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 0.69 and at very high levels showing extreme pessimism. CNN Fear and Greed in Extreme Fear zone at 24 from 28 last week.