Even with Friday’s ugly market action, investors and traders on Twitter remain bullish. The daily sentiment and momentum indicator for the S&P 500 Index (SPX) had a positive print on Friday. Seven day momentum remains in an uptrend and it’s likely the market will as long as that uptrend is intact.
2450 on SPX is a resistance level that has been tweeted since January. Once the market passed 2400, then 2450 was the next likely place to pause. It looks like we’ve got that pause. Support is at 2400 and 2350. I expect the market to hold somewhere in that area unless the trend in 7 day momentum is broken to the downside. One other thing of note, traders’ tweets didn’t show any fear on Friday. Notice the lack of tweets calling for prices below 2400 on SPX.
Breadth is repairing itself with the bullish count rising and the bearish count falling. This is another indication that we’re likely seeing a pause rather than an intermediate term top.
Bullishness still reigns. Until we see fear in traders’ price targets, a significant decline in the count of bullish stocks, or a break of the confirming trend line in 7 day momentum we should expect the market to move higher (even if it needs to rest for a week or so).