Barring a major drop today, the S&P500 is going to extend its weekly win streak to 5. With Thursday’s advance, SPX is also up 6 out of the last 7 days coming into Friday. That sounds quite bullish when you hear it. Then you realize that’s the 5th time such a streak has occurred in 2012 and it seems like its just business as usual for the markets these days.
With the market performing so well in 2012 sentiment was bound to turn more positive at some point. That’s exactly what happened over the last week as SPX ascended to new multi year highs. The AAII’s latest sentiment survey showed that those bullish on the market for the next 6 months increased by 3.2% to 45.6%. Meanwhile those bearish ticked lower by 1.8% to 27.2%. We’d prefer to have seen the % bullish remain unchanged as it would signify that people are still not buying into the rally.
The increase in those bullish likely means that some money was to put work by those on the sidelines over the last week to help propel the indexes higher. The sentiment, while less contrarian bullish then it was recently, isn’t yet contrarian bearish. However, one could argue that this is an early sign that a small pullback might be in the cards to get people on their toes again. Even if that is the case though we expect strong support to emerge around the prior breakout level of 1,370.
For our penny players we have 2 stocks that alot of our members seemed to be playing: NEOM & SNPK. Key support for NEOM relative to the move it just started to make is $0.018-$0.02 and resistance is $0.0235-$0.025. SNPK should have a lot of support between $0.60-$0.65 and it has resistance between $0.69-$0.72. We expect SNPK to establish higher support near $0.70 if it manages to break resistance. As for our option players, we have a bullish bias on PCLN. If in the first 15 minutes of the day PCLN shares rise on volume greater than (>) 75,000-100,000 shares then we expect a break above $660.
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