The SPX closed slightly higher for the week by +0.35% and stayed in a narrow range most of the week while many single stock names made explosive moves. The market continues to see dips being bought and the 8 EMA held this week near 4100 while the 21/55 EMA showed a bullish cross higher by the end of week. The 4222-price level overhead is the key low from January and right near the 50% retracement of the whole bear market decline from the highs. That 4200-4225 zone of resistance may get tested if 4116 is held as support and it will be crucial to see prices accept those new levels if this rally continues. The MACD and RSI continue to be in bullish mode sloping higher and the first level of support below 4100 likely comes in near 4020 in the form of the 21 EMA. Trend resistance off the January and March highs comes into play closer to a convergence of the 200-MA and 61.8% retracement level near 4350 as a higher upside target while 2022 VWAP at 4230 aligns closely with that 50% retrace and initial tough resistance level.

Market Sentiment/Breadth

AAII sentiment for the week ending 8/3 showed bullish responses rise to 30.6% from 27.7% prior while bearish responses fell to 38.9% from 40.1%. Neutral sentiment fell to 30.6% from 32.2%. Pessimism among individual investors fell for the fourth straight week. Optimism, meanwhile, is above 30% for the first time in over two months. This is the highest level of optimism recorded since June 2, 2022 (32.0%). Despite recent increases, bullish sentiment remains below its historical average of 38.0% for the 37th consecutive week. NAAIM Exposure index increased to 55.28 from 47.21 as asset managers added exposure and now slightly above last quarter’s average. Lipper fund flows for the week ending 8/3 had $7.5B of outflows in equities. Friday’s close saw NYSE new highs at 27 while new lows of 46 and the 10-day MA of New High/Low Differential at -15 and nearing a positive cross for first time since early April. The percentage of SPX stocks above their 50-MA is 73% while those above their 200-MA was 37%. NYSI and NASI Summation index both in bullish mode above 8-MA and sloping higher. NYMO closed at 43.8 and pulling back from overbought short term. Cumulative AD is above the 40 EMA and the 89 EMA long term signal has turned positive. CBOE Equity P/C 50-day MA at 0.66 and still showing pessimism but flattening out. CNN Fear and Greed index in Neutral zone at 50 from 41 last week.