Weekly Market View 9-12-22
The SPX had a strong impressive rebound off the key 3900 support level of the 61.8% fib retracement from the recent rally and Friday closed above its 8 and 21 EMA’s after clearing the important 4000 round number resistance level. Staying above that will be key going forward into September OPEX and month end. MACD is curling higher and potential for a bullish cross with momentum improving and sentiment still weak has the setup for a wall of worry climb higher barring news. The market is acting better the past week and getting back over 4000 can see a test of 4100-4150 as the 50% retrace of that decline. Clearing over 4175 likely points to a stronger market that has buyers in control. On the downside crucial support at 4k while the 3950 level is secondary and would need to hold for confidence to continue.
AAII sentiment for the week ending 9/7 showed bullish responses fall to 18.1% from 21.9% prior while bearish responses rose to 53.3% from 50.4%. Neutral sentiment rose to 28.7% from 27.7%. The results from the latest AAII Sentiment Survey show optimism about the short-term direction of the stock market falling below 20% for the first time in nine weeks. At the same time, pessimism rose to an 11-week high. Bullish sentiment declined 3.8 percentage points to 18.1%. Optimism was last lower on April 28, 2022 (16.4%). This is the 25th lowest weekly reading in the survey’s 35-year history. NAAIM Exposure index decreased to 27.33 from 32.36 and still below last quarters average of 41.75 and back to July levels. Lipper fund flows for the week ending 9/7 had $12.9B of outflows in equities. Friday’s close saw NYSE new highs at 36 while new lows of 29 and the 10-day MA of New High/Low Differential at -118. The percentage of SPX stocks above their 50-MA is 66.2% while those above their 200-MA was 39%. NYSI and NASI Summation index both bearish below 8-MA. NYMO McClellan Oscillator closed at -6 and is back to neutral after recently being very oversold. Cumulative AD is pointing higher and near a test of the 40 EMA and 89 EMA long term signal. CBOE Equity P/C 50-day MA at 0.65 and curling higher. CNN Fear and Greed index in neutral zone at 45 from 41 last week.