Everything from last week remains the same except for price. Price for the S&P 500 Index (SPX) hesitated for all of a day at the 200 day moving average that everyone was tweeting, then blew right through it. Now traders are targeting 2070, 2080, and 2100. That is about the only difference in our Twitter indicators from last week. One thing on the price target chart that’s interesting is the 1810 level is still being tweeted by multiple people almost every day. That suggests there’s still a lot of fear and doubt about this rally.
Last week all sectors were green, which almost always marks a short term top. This week all sectors are positive again. This is only the second time this overbought condition has occurred two weeks in a row. The last time it happened, price pushed higher during the second week, only to fall the following week. So this indicator is calling for a short term top.
7 day momentum and sentiment from Twitter is telling the same story as last week. No one likes this rally. There are a lot of tweets calling it a bear market rally, which is keeping the indicator below zero.
Breadth continues to improve in the face of negative sentiment.
Conclusion
Another week, same story. The sectors show an overbought condition and 7 day momentum can’t get above zero. This indicates we should see a short term top this week.
