The S&P 500 has managed to close above 2,800 this week and make a new 2019 high, but the index is still dealing with resistance between 2,815-2,820.  As shown in the charts for SPY below, this is an area that the index has tested (and failed) five times already over the last six months.  It would be a fitting end to what has been a strong week for US equities if the S&P could finally break through resistance today.  All it will take to push through is a gain of roughly 50 basis points today.  Happy Friday trading!

Note that the charts below are pulled directly from the Tools section of our membership area.  You can start using all of Bespoke’s helpful trading tools by starting a 2-month free trial to Bespoke Interactive today.

Bullish sentiment as seen through AAII’s weekly survey of individual investors released this morning showed another drop in bullish sentiment.  This comes following the first weekly decline that equities have seen so far in 2019. The percentage of investors expressing optimism dropped to 32.42% from 37.39% last week.  The week prior to that was a recent high, and the highest since early November, at 41.63%.  Given this week’s strong rally so far, it would not be surprising if bullish sentiment picks back up again in next week’s survey.

Conversely, bearish sentiment rose to its highest level since the final days of January coming in at 31.06% versus 26.75% last week.  Bearish sentiment has come well off of its lows of 20% only a couple of weeks ago.  Where it currently sits is much more in line with its historic average of 30.5%.

Meanwhile, neutral sentiment (investors not predicting any change in the stock market) moved slightly higher to 36.52% after dropping to 35.87% last week.  Unlike bullish and bearish sentiment which have seen a degree of mean reversion, neutral sentiment has remained fairly elevated for most of the new year.  Seems to make sense that investors largely report neutral sentiment as Q4 highs continue to be stiff resistance.

Initial Jobless Claims came in 4K above expectations at 229K on a seasonally adjusted basis; up from last week’s 223K.  This is near the upper end of the range jobless claims have been in for the past few months.  It has also now been two months since claims last hit a new low of 200K.  On the other hand, this week marks the 210th week that claims have come in below 300K.  So while perhaps the strength of the labor market could be taking a breather, by all means, it still appears healthy.

For the third week in a row, the four-week moving average of the seasonally adjusted data has declined; falling to 223.75K from 226.25K last week.  It has also now been three weeks since claims last hit a 52-week high.  Though more 52-week highs are certainly not out of the realm of possibilities in the near future, this improvement seems to point to these highs from the beginning of February being more consistent with random spikes that have been observed in the past rather than a new trend.  An additional note now looking back at February jobs data as a whole, with all of the data for the month in—namely last week’s abysmal Nonfarm Payrolls report showing only a gain of 20K—the labor market has seemed to calm down in the tail end of the month, and conditions seem to have improved slightly from the rough first couple of weeks in February.

On a non-seasonally adjusted basis, claims fell this week consistent with seasonal tendencies.  Declining 11.8K to 208.8K this week, the non-seasonally adjusted number came in far below the average of 325.9K for the current week of the year since 2000.  Also while it is near cycle lows, the same week last year actually saw a lower number of 204.9K.  Since the start of the year, there already has been five times that the non-seasonally adjusted claims number has come in worse than the prior year.  That compares to only twice that it had happened in 2018 and seven times in 2017.  So while still very healthy, going forward labor markets are certainly showing signs of losing momentum.