Just a quick update on our Twitter sentiment indicators for the S&P 500 Index (SPX) and sectors today since we didn’t do an update over the weekend. It appears to us that SPX is trying to decide what to do. Sentiment is showing a negative divergence from price, but it hasn’t met our three week to a month criteria that we use to provide meaningful signals. Over the next week we should have enough information to make a call (either a consolidation warning or confirmation of the uptrend).
Support and resistance numbers generated from the Twitter stream stayed the same last week even with the big moves in price. Support remains 1650 and 1600 and resistance is at 1665 and 1700. We did get some tweets in the 1635 area pointing to the lows on Thursday and Friday. We’ll need to see them continue into this week to consider them support if 1650 fails.
From a sector perspective the market looks like it wants to go higher. Consumer Staples and Utilities have a lagging bias while the leading sectors all look positive.
If we add it all up our conclusion is that the market should go higher. Price action on SPX has been poor lately, but support levels are holding, sentiment readings are mostly positive, and money is flowing into the right sectors for the rally to continue.