SPX had a wild week of volatility correcting back to the 50 day MA and finding support and returning back up to the April/May value area shown in the ES futures chart. The growth/value narrative is still strong and yields on the TNX subsided enough late in the week for the oversold market to bounce back and close above the 8/21 ema’s. A strong close to the week ahead of this week’s May option expiration. You can see the ES futures have a squeeze forming and momentum has shifted back to yellow which implies upside. If we can see Fridays rally hold and now close back below that 4120 zone it would be a strong sign of buyers back in control, but the Nasdaq will likely be driving things. This week’s expected move priced into the options for the SPX is about 69 points or a range between 4104-4242.
3 PEAKS MARKET SIGNALS OVERVIEW:
TREND- Short term trend of the 8/13/21 EMA’s = Weak bearish trend with Long term trend of the 21/55/89 EMA’s strong bullish and EMA’s stacked positive.
CONDITION/BREADTH- Momentum increased off the lows and now pointing up, RSI 55 back into neutral area, Bollinger %B back to neutral at 56. Breadth was very strong Friday from the open. Cumulative Advance/Decline Breadth held the 40 EMA but NYSI Summation is still pointing lower.
SENTIMENT- Bullish sentiment dropped quickly with just a 3 day sharp pullback you can see how fast trader’s change their tone. 36.5% Bulls in this weeks AAII Investor sentiment survey. Down from 44.3% last week. Bears ticked up to 27.0%. Bulls/bears ratio at 1.35. Sentiment data is looked at as contrarian and Bullish signals occur when Bulls drop under 35%, or when Bears rise above 50%.
SPY sectors overall still bullish strong trends with the strongest sector trends with XLB, XLF, XLE, XLP, XLI, XLV.
NYAD Cumulative AD breadth pulled back sharp but held the 40 EMA as it has all year. An important thing to watch
NYSI Summation staying weak and would like to see this pointing higher to feel better about higher prices
New highs- New lows differential saw a few red days last week after a long streak of being positive. The 10 and 30 day MA’s remain positive which is more important than one day readings.
Seasonality for May options expiration week starts out bullish before seeing some bearish odds for mid to late week.
Individual Stocks of note:
Weekly inside candles- PFE, NKE, TXN, BMY, ZTS, BDX, MRNA, VRTX, MNST, BNTX, ROKU, EA, PTON, DDOG, HRL, VIAC, ABC, CAH, LBTYA, LBTYK, HFC, INDA
8/21 EMA Daily Bull Cross- INTU, TEL, IJH, MDY, IXUS, VEU, TCF, WH, SRPT, ACWX, DAN, UPRO, SPXL, BLUE, ASHR, VXUS
Stocks in TTM Squeezes within 10% of 52 week highs: SPY, GE, EFA, PFE, CNP, KO, EPD, LUV, IEF, HPE, WDC, XLV, WMT, GPS, PEP, WY, KSS, SO, SHY, CSX, LB, WBA, AEO, CAG, YETI, EA, ABC, EXPE, ANF, MCD, EWW, BBY, UNP, ED, ROST, TSN, ACN, DE, CWH