Last week, we mentioned that we were finally seeing hope for higher prices in the S&P 500 Index (SPX) with tweets calling for 2220 and 2250. This past week the market blew right through both price targets and now traders are starting to call for 2300 as the next stop.
As the market pushes higher, sentiment is starting to wane. Daily sentiment is falling with each move higher as more traders are either calling for a top or the need to consolidate recent gains. Seven day momentum is painting a lower peak and diverging from the market, which is another signal that this rally is getting tired in market participants minds.
Breadth isn’t moving sharply higher due to the count of bullish stocks lagging price. This indicates that the move higher in the indexes isn’t being supported by a large number of individual stocks.
Although there are scattered tweets calling for 2300 on SPX, sentiment for SPX is starting to diverge from price and sentiment for individual stocks is lagging sentiment for the indexes. It looks like a good time for the market to consolidate recent gains.