Did Bulls Send Message Friday? Posted by Coolhand

Friday's market action saw the bulls come out swinging and they were able to hold significant gains all the way into the close. The action helped the S&P close with a decent weekly gain, but the DWCPF was still thrown for a sizable loss despite Friday's rally. Friday's market action did give us some things to watch moving forward.

View attachment 49160
View attachment 49161

Looking at the charts, we can see the S&P broke out higher and closed with a fresh all-time high. Momentum has yet to turn up, but if the index can get some follow through we should see momentum rise. Price on the DWCPF did manage to retake its 50 dma. That's a start, but this index has been very frustrating for those looking for new highs. Momentum has not turned up here either. The good news is that there seems to be a floor under this index (for now). But the length of this sideways dance is not bullish in my opinion. Still, it can go either way longer term.

View attachment 49162

Another thing of note is the sharp rise in cumulative breadth on Friday. That often spells follow through in the coming days. The signal was already bullish and this spike on Friday could be a marker for more gains this week.

Our TSP sentiment survey came in neutral. So, we have a bullish NAAIM reading and now a neutral TSP Talk reading. Both readings were taken before Friday's rally, so that could affect its interpretation to some extent. The surveys may have been more bullish if the readings were taken at the end of the week (my opinion). But it doesn't matter that much as were taking about neutral to bullish sentiment.

So, as I mentioned above, Friday may have been the start of a new up-leg (at least for the S&P). We'll know soon enough. But the smart money remains bullish, so there is little reason to doubt the bulls ability to continue driving this market.

I remain bullish on the S&P. I am going to go bullish on the DWCPF for the short term, but still neutral longer term.