Last week, I mentioned that the bulls still had a normal volume and intensity of tweets, but that the bears got extremely vocal. This week, I’m seeing a mirror image where the bears are still quite vocal, but the bulls are on a rampage. The net result, is fairly muted daily prints in sentiment readings for the S&P 500 Index (SPX). It will probably take another week for one side or the other to give up.
The rally in SPX blew right through every resistance level tweeted by traders until it hit recent highs at 2080. The next resistance level is 2200, but there is a dearth of tweets calling for any higher levels. This suggests that traders are still waiting for a clear resolution of the range between 2100 and 2200.
Breadth strengthened this week as the number of bullish stocks on Twitter ticked up slightly. One thing to note is that the strong rally didn’t repair the damage done to breadth during the decline. The bulls want to see this rectified for a broad based rally to ensue.
The bulls have come out in force, but the bears haven’t retreated yet. There is little hope for prices above 2200 on SPX. And the number of bullish stocks is lagging the indexes. This suggests that traders and investors are still waiting for a break above 2200 before deploying cash.