Weekly Market View 9-19-21
The S&P (SPX) ended the week below the recent multi-day range as we continue to trade under pressure since hitting new highs earlier this month. We closed below monthly VPOC for just the second time since mid-May and tested the 55-EMA for the first time since 7/19. Since November when the current longer-term trend started higher, we’ve seen six instances where we reverted back to the rising 55-EMA and found support each time, so how we react this week will be key to watch. A bounce back higher has resistance at 4468.5-4471.25 that aligns with the 8/21 EMA bear cross as well as the top of monthly value. The next notable area is 4,500 and the untested VPOC from 9/9. A break further below the 55-EMA and 4393 would target 4434.75 which likely sees a reaction. If we’re unable to hold that key spot, the path lower would target 4264 but most likely a choppy move to that spot.
AAII sentiment for the week ending 9/15 showed bulls dropped sharply to 22.4% vs 38.9% prior. Bearish sentiment rose to 39.3% vs 27.2% while neutral sentiment rose to 38.3% vs 33.9%. Bullish sentiment hit a 1-year low. NAAIM Exposure rose marginally to 87.02% vs 84.68% prior. Lipper Fund flows had $5.9B of inflows to equities. As of Friday’s close we had 120 new highs and 95 new lows, much more balanced breadth. The percentage of stocks above their 50-day MA was 43.5% while those above their 200-day was 54.4%. The percentage of stocks below their 50-day MA continues to form a bearish divergence with price action. NYSI fell for the week back to 15.75 and under its 8-EMA in a cautious sign. NASI also moved back under its 8-EMA but looking for a more decisive break below this week. Cumulative AD remains off the 52-week highs but above its 89-EMA and a quiet week overall. NYMO was -19.92 to close the week and did hit an low this week around -27, oversold but not an extreme by any means. VIX:VXV ratio was 0.896. CNN Fear and Greed closed at 34, ‘Fear’, and flat for the week with concerns over breadth and volatility.