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.
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.
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.
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.