Data Mixed As WellOpinion
The indexes closed mixed Friday with negative internals on the NYSE while those on the NASDAQ were positive while volumes declined on both exchanges from the prior session. There was a mix of positive and negative evets on the charts while the data remains mixed as well. Our overall opinion is that the market waters are getting muddier and more difficult to discern regarding near term probabilities. While we are getting a sense that some headwinds may be gathering, there is not quite enough evidence at this stage to actually prompt a change in our short term “neutral/positive” outlook for the major equity indexes.
- On the charts, the indexes closed mixed Friday with negative NYSE internals while the NASDAQ’s were positive. The COMPQX (age 3), NDX (page 3) and DJT (page 4) managed to post gains as the rest declined. Positive events were seen on the COMPQX as it closed above short term resistance while the DJT closed back above its short term uptrend line. On the negative side of the scales, the SPX (page 2) gave a bearish stochastic crossover signal. The net result is we now find the SPX, DJI (page 2) and MID (page 4) is near term sideways patterns while the rest are grudgingly clawing their way in uptrends. The cumulative advance decline lines for the All Exchange, NYSE and NASDAQ have moderated in slope but remain positive and above their 50 DMAs.
- The data is mixed as well. All of the McClellan OB/OS Oscillators are back at neutral levels (All Exchange:+9.49/+45.34 NYSE:+2.17/+47.28 NASDAQ:+16.29/+45.62). The Equity P/C (0.61) and OpenInsider Buy/Sell Ratio (37.2) are also neutral while the Total P/C (0.92) and OEX P/C (0.67) are bullish. Valuation finds the forward 12-month P/E for the SPX based on forward 12 month consensus earnings estimates from Bloomberg of $163.25 at a 16.7 multiple versus the “rule of 20” implied fair value of 17.0.
- In conclusion, recent market action has, in our opinion, muddied the waters where being able to have a high degree of conviction in our market projections is becoming a bit more difficult. That’s not a cop out. It is simply the reality. Nonetheless, at this point we are not ready to actually alter our near term “neutral/positive” outlook for the major equity indexes.
- SPX: 2,671/2,741
- DJI: 24,357/25,017
- NASDAQ: 7,283/7,475
- NDX: 6,769/7,017
- DJT: 10,713/10,995
- MID: 1,917/1,979
- Russell: 1,582/NA
- VALUA: 6,124/6,288