The SPX closed slightly higher for the week yet again by +0.6% as the major averages sustained a one-time framing grind higher holding above the rising 8 day EMA currently at just above 5700 and would be the first sign of a pullback starting if prices closed below that spot. With one day left in September and the third quarter its likely safe to say it will conclude as a positive one up strongly off the mid Sept lows. The exciting part is that sentiment is not yet at extremes and even though election jitters may keep the broad markets in a rotational mode that sees a sideways to higher grind, being at or near all time highs is not bearish. RSI does show some minor negative divergences forming on the longer timeframes, but this is only confirmed by price action if it were to break lower under the 21 day as a first level of important near 5640. Support is stronger near the 55-day MA at 5550 and as long as trend continues to point higher, then the upper fib extensions are the next stopping point, currently at 5815 as the first target while a higher 1.618% extension comes in right near 6000 as a likely target into Q4 at some point now as seasonality and money flows are coming into the stronger part of the year. Earnings season also just around the corner, and should the markets run higher from here still ahead of that then it could setup a small October pullback as a sell the news event before the election. November is seasonally one of the strongest months of the calendar year so looking ahead would warrant being prepared to buy dips ahead.

Market Sentiment/Breadth

AAII sentiment for the week ending 9/25 showed bullish responses fall to 49.6% from 50.8% prior while bearish responses fell to 23.7% from 26.4%. Neutral sentiment rose to 26.7% from 22.8%. The bull-bear spread (bullish minus bearish sentiment) increased 1.5 percentage points to 25.9%. The bull-bear spread is above its historical average of 6.5% for the 20th time in 21 weeks. The NAAIM Exposure index ticked down to 86.64 from 87.46 last week and is slightly above last quarter’s average of 81.70. Total equity fund flows for the week ending 9/18 had $-8.6 billion of outflows in equities. Friday’s close saw NYSE new highs at 228, while new lows of 5 and the 10-day MA of New High/Low Differential is making new recent highs at +291. The percentage of SPX stocks above their 50-MA jumped to 83.6% while those above their 200-MA was 81.6%. NYSI Summation index popped higher and is above its 8-MA for a short-term bullish signal. NYMO McClellan Oscillator closed at +12 and Neutral. The cumulative AD line had a strong thrust to new highs and is above the 40 EMA short term breadth trend and above the 89 EMA long term bull signal. CBOE Equity P/C 50-day MA at 0.64. CNN Fear and Greed index is in the Greed zone now at 68 from 63 last week. The VIX/VXV ratio closed at 0.87. This measures the spread between 1- and 3-month implied volatility, above 1.0 shows fear and can mark a low.