Monthly Archives: October 2016

SPX Range is 2120 to 2160

Just a quick note this week. The current range of support and resistance for the S&P 500 Index (SPX) is between 2120 and 2160. A break below 2120 (on a closing basis) will carry quickly to 2100, while a break above 2160 should carry back to 2180. At this point, we’re just waiting for a break of the range to see how the other sentiment indicators react.

161030spxsr

You can see the daily Twitter sentiment chart for the stock market (SPX) here.

You can see the breadth chart here.

facebooktwittergoogle_plusredditpinterestlinkedinmail

2120 on SPX Starting to Look Critical

2120 on the S&P 500 Index (SPX) is starting to look like a critical level that the market must hold. A few weeks ago the market bounced at the first resistance level tweeted by traders on Twitter. Since that time traders have simply been chasing price and not tweeting anticipation of higher prices. This indicates that everyone is waiting to see if 2120 breaks to the downside (rather than looking up in hope).

161023spxSR

As the market is testing support, the number of bullish stocks on Twitter has dipped to what normally counts as a bullish floor. This indicates that if 2120 on SPX breaks lower the number of bullish stocks will dip back into bear market territory.

161023breadth

One ray of hope comes from daily sentiment readings. On Wednesday when SPX broke above 2140 the bears went silent. The bulls didn’t increase their intensity, but the silence from the bears indicates that they may capitulate if the market can get above the 2140 to 2150 area and hold.

161023spx

 

Conclusion

Everyone is watching to see if 2120 on SPX holds. The bears got discouraged when the market got above 2140. It feels like the spring is coiling tight and a break one way or the other should come soon.

facebooktwittergoogle_plusredditpinterestlinkedinmail

Twitter Sentiment for the Stock Market Still Positive

We’re sitting roughly where we were last week with Twitter sentiment for the S&P 500 Index (SPX) still showing signs that market participants are ready to test the all time highs. 7 day momentum broke above its downtrend line as the market was moving out of the last low and has been able to stay above zero even as the market has fallen. This is a good sign for the bulls.

Twitter sentiment for the stock market

Breadth calculated from the most bullish and bearish stocks on Twitter continues to improve as the number of bearish stocks falls. This indicates that traders aren’t shorting this level. Instead, they’re waiting for a move before committing.

161009breadth

Support and resistance levels tweeted by traders on Twitter now show a large range for SPX with 2100 on the downside and 2200 on the upside. A smaller, and more recent, range is between 2120 and 2180. A break of the range is the most important thing we show watch over the next few weeks.

161009spxSR

 

Conclusion

Sentiment is still projecting a move to new highs and is being aided by trader’s tweets. All the bulls need is a break above 2200 to start a rally that should continue into year end.

facebooktwittergoogle_plusredditpinterestlinkedinmail

New Highs Ahead

Sentiment for the stock market generated from the Twitter stream is indicating that market participants are ready to test new highs again. We’ve seen several weeks of consolidation on the S&P 500 Index (SPX) that was confirmed by a down trend in 7 day momentum. Earlier this week, that down trend was broken. When the trend of sentiment changes price generally follows. This indicates that the market should make an attempt to break to new highs.

161002spx

Breadth calculated between the most bullish and bearish stocks on the Twitter stream has turned back up. The count of bullish stocks continues to be above normal bull market levels and the number of bearish stocks are falling. This indicates traders are accumulating shares rather than looking for shorting opportunities.

161002breadth

Support and resistance levels for SPX gleaned from Twitter show a range between 2120 on the downside and 2180 on the upside. However, 2200 is the most important level as it is generating the most tweets. There are very few tweets calling for prices above 2200 which indicates traders are waiting for a break of that level before getting excited.

161002spxSR

Conclusion

Sentiment indicates that the market should make a run for 2200 on SPX. 7 day momentum has broken its down trend line, the number of bearish stocks is falling, and everyone is tweeting 2200. But, the market will need a break above that level to get market participants excited for a year end rally.

 

facebooktwittergoogle_plusredditpinterestlinkedinmail