The S&P 500 (SPX) dipped back to its rising 8-week MA this week before bouncing back and finishing nearly unchanged. Thursday’s low tested July VPOC at 4342 – which also aligned with the 50-EMA — where buyers stepped in and drove back into August value. The current value-range high at 4444 in focus early week for a move above. We’ve got a cluster of short-term moving averages that have flattened out around the 4415-4425 zone and Friday managed to close above both the 8- and 21-day. RSI dipped back to 50 and bounced a bit while MACD is off the highs and starting to flatten out, potential for both to curl higher this week. A move above August value targets recent highs at 4476.5 and then a measured move to 4525. The bigger range move targets upside to 4543.5. A move under 4381.5 can signal more weakness with 4347.75 and then 4310 in focus which is the low-end of a large rising wedge pattern we’ve been watching for the past month.

Market Sentiment/Breadth

AAII Sentiment for the week ending 8/18 showed a dip in bullish responses to 33.2% vs 37% while bearish responses rose to 35.1% vs 31.5%. Neutral sentiment rose slightly to 31.7% vs 31.5%. This is the highest level of bearish responses in six months. NAAIM Exposure fell to 70.57 last week, down from the excessive highs recently of 97.55. Lipper Fund flows had $13.9B of inflows to equities, largest in more than two months. As of Friday’s close, there were 164 new highs vs 291 new lows, weakening breadth continues. The number of new lows on the Nasdaq hit its highest level since March this week. The percentage of stocks above their 50-day MA was 41.52%, dropping from around 55% in early August. The percentage stocks above their 200-day fell to 62.42% this week, lowest since the week before the election in 2020. NYSI fell to -7.75 and back below its 8-EMA in a cautious move. NASI is similar below its 8-EMA. Cumulative AD fell to its lowest level since mid-July. CNN Fear and Greed fell to 25, down from 43.