Near-Term Outlook Turns “Neutral”Opinion
All of the indexes closed lower yesterday with negative internals on the NYSE and NASDAQ as volume rose on both exchanges from the prior session. Numerous negative technical events occurred on the charts, including some near term support levels being violated. The data is mixed resulting in no strong forecasting signal. Thus given the action on the charts, we are forced to shift our previous “neutral/positive” near term outlook for the major equity indexes to “neutral”.
- On the charts, all of the indexes closed lower yesterday with negative internals on the NYSE and NASDAQ on higher the prior volume. All closed at or near their intraday lows. Negative technical events occurred in the following forms. The SPX (page 2), MID (page 4), RTY (page 5) and VALUA (page 5) closed below near term support. The SPX also closed below its 50 DMA as did the DJI (page 2). As well, the SPX, DJI, COMPQX (page 3), DJT (page 4), MID, RTY and VALUA all closed below their respective near term uptrend lines. We would also note the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ all closed below their 50 DMAs with the All Exchange and NYSE turning neutral while the NASDAQ’s turned negative. While the chart trends have not actually turned negative, there was enough deterioration to shift their patterns to neutral with the one exception of the NDX that still remains in its uptrend and above support.
- The data is largely neutral and un instructive. The McClellan OB/OS Oscillators remain neutral (All Exchange:-2.23/-43.08 NYSE:-15.75/-34.8 NASDAQ:-22.58/-42.14). The Equity Put/Call Ratio is also neutral at 0.67 while the OEX and Total Put/Call Ratios are counterbalancing with a bearish 1.44 and bullish 1.08 respectively. The OpenInsider Buy/Sell Ratio remains neutral at 50.4.
- In conclusion, given the breaks of support and trend lines yesterday with no strong bullish data message at present, we must follow the discipline and shift our near-term outlook for the major equity indexes from “neutral;/positive” to “neutral”.