Weekly Market View 8-1-21
It was a quiet week for the S&P 500 (SPX) with its narrowest closing range since late May as we consolidated above the 8-EMA and under new highs. The overall stance remains neutral given how we remain extended near resistance of a rising wedge from the May highs with momentum starting to slow a bit. MACD is near a bearish crossover and RSI continues to show a strong negative divergence since early July. A move under last week’s lows at 4,364.25 has room back to the 21-EMA at 4,350 and then the low-end of a high-volume node at 4,310 from July. There’s a low-volume gap under back to 4,240. A breakout of the current five-bar consolidation above 4,422.5 has a measured move to 4,479.5. The wider range from July has a measured move out to 4,540.
AAII Sentiment for the week ending 7/28 saw a rise in bullish responses to 36.2% from 30.6% prior while bearish sentiment fell to 24.1% from 30.6%. Neutral sentiment rose slightly to 39.7%, a new 19-month high. NAAIM Exposure rose slightly to 78.39 and remains in a neutral zone. Lipper Fund flows had $8.7B of inflows to equities, the largest in over five weeks. As of Friday’s close, we saw 364 new highs vs 108 new lows. The percentage of stocks below their 50-MA was 43.3% while those above their 200-day was 63.8%, both showing bearish divergence to the move around recent highs. NYSE Summation fell to 130.52 and remains below the 8-EMA. NASI is also below its 8-EMA. Cumulative AD is below the recent highs despite making a small move higher for the week. CBOE Equity P/C 50-MA was 0.538 and overall rising since early June. NYMO was 0.92 and neutral. CNN Fear and Greed was 24 and back to ‘extreme fear.’