Weekly Market View 8-8-21
The S&P 500 (SPX) broke out to new all-time highs this week, clearing a narrow two-week range after the jobs report on Friday. We tested the low-end of the current balance on Tuesday and ran right back to the top of the range before balancing and breaking out. The 8-EMA was supportive throughout the week and now tilting higher at 4404.50, a key area to watch on initial weakness. The current range has a measured move to 4,480. The wider range from June and July still has a longer-term target up at 4,550. The big concern remains how close we’re trading near resistance of a multi-month rising wedge. A move under the 8-day can re-test 4,385, 4,366, and then 4,320. MACD is not very overbought at all and bull cross on Friday but looking for follow-through. RSI is back above 60 and broke out of a pullback in a positive sign.
AAII Sentiment for the week ending 8/4 showed bulls remain unchanged at 36.1% vs 36.2% prior while bearish sentiment rose to 31.7% from 24.1%. Neutral sentiment fell to 32.2%, reversing a big trend over the last four weeks. NAAIM Exposure jumped again to 97.72 and back near extreme highs. Lipper Fund flows had $2B of inflows to equities. As of Friday’s close there were 470 new highs vs 122 new lows. The percentage of stocks above their 50-day MA was 50.04 and remains well below its June peak. The percentage above their 200-day was 71.33% and also showing the weak participation since June. NYSI remains below its 8-EMA but has been flattening out recently and very close to a break back above. NASI is similarly positioned for a break back above the 8-EMA. Cumulative AD is working higher – highest since mid-July — and just below new highs. CNN Fear and Greed is 36, up from 24 last week.