Twitter 7 Day momentum for the S&P 500 index (SPX) has confirmed the new uptrend and is indicating that it will most likely have staying power. One kink in the works is that momentum is overbought. This indicates that the market will need to digest recent gains before it can break to all time highs.
Support and resistance levels computed from the Twitter stream for SPX also indicate that the market will most likely need to at least pause for a day or so near 2120 before moving higher. This level offers resistance, but the 2040 area is much stronger. Below the market, support is at 2100, 2065, and 2040.
Breadth calculated between the number of bullish and bearish stocks on Twitter turned down with the last dip, but no real damage was done. The number of bearish stocks didn’t rise substantially as the market fell. This indicates that traders didn’t push their shorts. Instead, it looked like a lot of bottom fishing was occurring.
Sector sentiment from Twitter is showing lack of support for Basic Materials and tepid support for consumer staples. Overall this is constructive, but something to keep an eye on because when we see support for all sectors at once it almost always marks a short term top.
Market participants are bullish and want to push the market higher. However, we may need some time to work off the over bought readings in 7 day momentum. A bit of chop below the 2020 area on SPX before moving higher would work of that pressure.