NASDAQ Cumulative A/D Turns PositiveOpinion
All of the indexes closed higher Friday with positive internals on the NYSE and NASDAQ as volumes declined on both exchanges from the prior session. All of the indexes, again, posted new closing highs. The data remains largely neutral in nature. As such, and in spite of historically high valuation, the charts and data continue to suggest respecting the current near term uptrends of the indexes until proven otherwise.
- On the charts, all of the indexes posted new closing highs Friday with positive market internals. All of the near term uptrends remain intact while the NASDAQ cumulative advance/decline line finally joined the All Exchange and NYSE A/Ds by turning positive from its prior neutral trend. Cautionary sell signals have yet to be registered on the charts at this stage.
- The data is largely neutral including all of the McClellan OB/OS Oscillators (All Exchange:+35.84/+31.32 NYSE:+33.76/+46.29 NASDAQ:+34.19/+17.15). The Total Put/Call Ratio (0.82) and OpenInsider Buy/Sell Ratio (45.7) are neutral as well with the Equity Put/Call Ratio (0.5) and OEX Put/Call Ratio (0.75) counterbalancing with negative and positive readings respectively. Based on current Bloomberg consensus forward 12-month earnings estimates for the SPX of $140.60, valuation remains extended at a 19.4 forward multiple.
- In conclusion, in spite of high valuation, the charts and data continue to suggest respecting the current near term uptrends of the indexes until proven otherwise, in our opinion.