With the market breaking to new highs, I’m seeing some encouraging signs from sentiment for the S&P 500 Index (SPX) computed from the Twitter stream. 7 day momentum and sentiment has moved above the level that has marked overbought conditions during the consolidation (bear market) that started in mid 2015. If it can make a decisive break higher and also hold above the bull market oversold level it will be very bullish for the market. It will indicate market participants getting excited about SPX moving higher. Daily sentiment still shows too much fear with large negative prints on down days. If that condition can clear on the next dip, then I suspect we’ll get a large follow through rally.
Breadth is moving higher with a burst in the number of bullish stocks on the Twitter stream. This is exactly what I wanted to see if the market broke to new highs. This is an indication that investors are buying the breakout rather than selling into it.
Support and resistance numbers gleaned from the Twitter stream for SPX show fear abating and some solid support at 2135 and 2100. Hope is returning with calls for 2200 and 2300. During bull markets traders tweet price targets well above current levels so the tweets for 2300 are very encouraging.
Sentiment from Twitter for SPX is showing signs that the market finally wants to move higher. 7 day momentum is back to normal bull market levels, breath is improving, and traders are tweeting price targets well above the market.