Weekly Market View 8-29-21
The S&P 500 (SPX) broke out to new highs last week after Friday’s comments from Jerome Powell. It was a quiet week leading up to the event. We continued to rebound off the 50-MA early in the week and then settled into a narrow balancing range above the 8-EMA. Friday’s VPOC closed at 4506 and above the prior balance range, so potential for further price exploration higher next week because sellers were unable to take much control on Friday. RSI and MACD are pretty flat with the recent action but both remain in positive territory overall and not near overbought. The biggest concern remains the rising channel from the May lows which suggests risk/reward remains unfavorable at these levels. The recent balance area has a measured move to 4531.75. A move lower back into the prior balance has support at 4490.75, 4482.25, and then 4466.
AAII Sentiment for the week ending 8/25 showed a rise in bulls to 39.6% vs 33.2% prior while bears fell to 33% from 35.1%. Neutral sentiment fell to 27.5% vs 31.7% prior. This is the first time bullish sentiment is above the long-term average in the last seven weeks. NAAIM Exposure rebounded to 92.83 last week and remains near the range high but not quite an extreme. Lipper Fund flows had $6.4B of outflows from equities, the largest exodus from stocks in over five weeks. As of Friday’s close there were 638 new highs vs 69 new lows, extremely strong breadth. The percentage of stocks above their 50-day MA was 55.8% vs 61.1% of their 200-day. NYSI rose slightly to 17.59 and remains below its 8-EMA but on watch this week for a cross above. NASI crossed above its 8-EMA on Friday. Cumulative AD rose slightly for the week but remains below its June highs. CBOE Equity P/C 50-day MA is 0.506 and near six-month highs. SKEW is 162.43 and broke to its highest levels since June. CNN Fear and Greed is 50, up from 23 a week ago.