The SPX closed the week in a sharp selloff that pierced the 21 EMA and closed below the 55 EMA after bouncing Thursday to the 4200 level. The 50% retracement at 4227 and declining 200-day MA have proved to be stiff resistance for the SPX this month and now with a MACD bear cross confirmed last week there should be caution if the market maintains below the 21 EMA currently overhead at 4150. The 50% retrace from the June lows comes in at 3981 and just below the key 4000 round number of large support so that could be a likely target from here for a level to look for a bounce. RSI also now back under 50 after being overbought recently near 70 shows signs that the rally from June has likely concluded for now and the market will need to prove itself to reignite higher.

Market Sentiment/Breadth

AAII sentiment for the week ending 8/24 showed bullish responses fall to 27.7% from 33.3% prior while bearish responses rose to 42.4% from 37.2%. Neutral sentiment was flat to 29.9% from 29.5%. The survey results show optimism about the short-term direction of the stock market falling to its lowest level for the month of August. At the same time, pessimism rose back to an unusually high level. Bullish sentiment fell 5.6 percentage points to 27.7%. The pullback puts optimism right at the breakpoint between typical and unusually low readings. NAAIM Exposure index decreased to 54.86 from 64.44 but still above 2022’s average of 49.6. Lipper fund flows for the week ending 8/24 had $1.2B of outflows in equities. Friday’s close saw NYSE new highs at 28 while new lows of 97 and the 10-day MA of New High/Low Differential at -11. The percentage of SPX stocks above their 50-MA is 64.6% while those above their 200-MA was 34.6%. NYSI and NASI Summation index both crossed down bearish below 8-MA. NYMO closed at -47.6 and is back down near short term oversold. Cumulative AD pulled back but is still above the 40 EMA and 89 EMA long term signal. CBOE Equity P/C 50-day MA at 0.64 and declining but still near highs. CNN Fear and Greed index in Fear zone at 44 from 51 last week.