Data Remains Largely NeutralOpinion
The indexes closed mixed yesterday with positive internals on the NYSE and NASDAQ as volumes declined from the prior session. There were some minor events registered on the charts but no support or resistance levels were violated while the COMPQX made another new closing high. The data remains largely neutral. As such, we have yet to see enough of a change in the evidence to alter our near term “neutral/positive” outlook for the major equity indexes.
- On the charts, The DJI (page 2) and DJT (page 3) closed lower on the day as the rest posted gains. The DJI closed below its short term uptrend line, turning its pattern to neutral and joining the DJT, MID (page 4) and RTY in that status. The SPX (page 2), COMPQX (page 3) and VALUA (page 5) remain in their short term uptrends. However, the VALUA gave a “bearish stochastic crossover signal” yesterday as did the MID. The COMPQX posted yet another new closing high. A point of interest for us is that while the SPX is just shy of making a new closing high, only 54.5% of its components are trading above their 50 DMAs, describing the selectivity of index participants.
- The data remains largely neutral, including all of the McClellan OB/OS Oscillators (All Exchange:+25.42/+28.05 NYSE:+17.18/+47.34 NASDAQ:+37.41/+10.87). The Equity Put/Call ratio is neutral s well at 0.62 as is the recent AAII Bear/Bull Ratio (contrary indicator) at 31.71/38.05. Two outliers are the OEX Put/Call Ratio at 0.57 showing the pros long calls and expecting strength while the Rydex Ratio (contrary indicator) remains very bearish at 70.7 as leveraged ETF traders continue their highly leveraged long exposure.
- In conclusion, given the current state of the charts and data, we are inclined to keep our near term “neutral/positive” outlook for the major equity indexes in place.