During the last rally, there haven’t been a lot of strong bullish signals being sent from sentiment on the Twitter stream. Instead,it looks like everyone is waiting to see if the S&P 500 Index (SPX) can break to new all time highs.

First take a look at price target tweets gleaned from the Twitter stream. There aren’t a lot of tweets above the all time highs. This indicates that traders are waiting and/or chasing price. They are tweeting price after it is achieved rather than in anticipation of a move higher.

Another sign of weakness is that 7 day momentum and sentiment from Twitter for SPX is still below bear market overbought levels. I’d expect a good break out to new highs to be accompanied by a move above the red line on the chart below. Without it, we may be seeing a bull trap.

Breadth between bullish and bearish stocks is also discouraging. Although it is well above zero, it isn’t even close to levels normally associated with new all time highs. I’d like to see the number of bullish stocks expand quickly if the market breaks higher.

Conclusion

Price is moving higher, but without huge support from sentiment. It looks like people are waiting to see if a break to new all time highs can be achieved and held before getting excited. On a positive note, if a break higher does occur sentiment has a lot of room rise before becoming overbought.