Data ModeratesOpinion
The bulk of the indexes closed lower yesterday with the one exception of the DJI. Internals were mixed on the NYSE as the NASDAQ’s came in negative. Volumes rose on both exchanges yet no uptrend lines were violated on the charts. The data has moderated to a more neutral projection from yesterday morning’s mild warning signs. So in spite of yesterday’s declines, we have yet to see enough of a shift of the evidence to cause a change in our current opinion that the near term uptrends of the indexes should be respected until proven otherwise.
- On the charts, all of the indexes closed lower yesterday with the one exception of the DJI (page 2) that managed to make another new closing high. The NYSE saw negative breadth but positive up/down volume with the NASDAQ’s internals negative on both accounts. Volumes rose on both exchanges. From our perspective, what is more important is none of the near term uptrend lines of the indexes were violated on a closing basis with support levels remaining intact. The cumulative advance decline lines remain positive as well. We would note, however, the DJT (page 4) gave a “bearish stochastic crossover signal” and closed directly on its trend line that warrants monitoring, in our opinion. Yet as this is being written, no violation has actually occurred. The fact that some of the indexes are on their second acceleration of their uptrends is also something to watch closely.
- The data has returned to mostly neutral readings with only the NYSE 21 day McClellan OB/OS Oscillator mildly overbought as the rest are now at neutral levels (All Exchange:+5.98/+45.35 NYSE:+3.43/+53.83 NASDAQ:+8.76/+39.29). The Equity Put/Call Ratio (contrary indicator) remains bearish at 0.53 but the Total Put/Call Ratio is a neutral 0.84 with the OEX Put/Call Ratio bullish at 0.88. While still neutral, insider buying picked up a bit lifting the OpenInsider Buy/Sell Ratio to 36.6.
- In conclusion, we continue to be of the opinion that the near term uptrends of the various indexes should continue to be respected until proven otherwise.