Data Remains Largely Neutral
All of the indexes closed higher Tuesday with positive internals on the NYSE and NASDAQ as volumes increased on both exchanges from the prior session. The charts saw two new closing highs registered while two more are challenging resistance. The data remains largely neutral in nature. As such we continue to have a “neutral/[positive” outlook for the major equity indexes over the near term.
- On the charts, all of the indexes closed higher yesterday with positive internals on higher trading volumes. The COMPQX (page 3) and NDX (page 3) posted new closing highs while the SPX (page 2) closed at resistance and the DJI (page 2) closed just shy of resistance. Should the SPX and DJI manage to violate said resistance on a closing basis as they currently challenge those levels, it would add a more bullish tone to our outlook. Yet the indexes as a whole remain evenly split in their short term trends with the SPX, DJI, COMPQX and NDX positive while the DJT (page 4), MID (page 4), RTY (page 5) and VALUA (page 5) remain in neutral sideways patterns. The stochastic levels for the SPX, DJI, COMPQX and NDX remain overbought but have not generated bearish crossover signals at this point while the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain neutral and above their 50 DMAs.
- The data is mostly neutral including all of the McClellan OB/OS Oscillators (All Exchange:+12.45/-10.76 NYSE:+30.38/-11.75 NASDAQ:-2.65/-10.6). The Equity Put/Call Ratio (0.65), OEX P/C (1.39) and OpenIsider Buy/Sell Ratio (38.3) are all neutral as well while the Total P/C is a bullish 0.95. Valuation finds consensus forward 12 month earnings estimates for the SPX of $167.51 leaving the forward 12 month p/e for the SPX at 16.8 versus the “rule of 20” implied fair value at a 17.1 multiple and a 5.96% earnings yield.