All McClellan OB/OS Oscillators Neutral
The major equity indexes closed mixed yesterday with negative internals on the NYSE while the NASDAQ saw negative breadth but positive up/down volume. Overall trading volumes declined on both exchanges from the prior session.
Three indexes posted new closing highs, leaving the near-term trends unchanged for each of the eight we follow with all in near-term uptrends, save one. The data saw a few shifts and continues to send a generally neutral message, in our opinion. As such, we remain near-term “neutral/positive” in our macro-equity outlook.
On the charts, the indexes closed mixed yesterday with generally negative internals as trading volumes declined on both exchanges.
- The SPX, COMPQX, and NDX posted new closing highs as the rest of the indexes declined.
- However, none of the action altered the current state of the charts which are all in near-term uptrends except the DJI, which is neutral.
- The negative internals were insufficient to alter the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ that remain short term positive.
- No stochastic signals were generated.
The data saw a few shifts.
- The McClellan 1-Day OB/OS Oscillators are now all in neutral territory (All Exchange: +34.86 NYSE: +19.18 NASDAQ: +46.75).
- The Rydex Ratio (contrarian indicator) measuring the action of the leveraged ETF traders backed off to neutral from bearish at 0.91 as they decreased their leveraged long exposure.
- The Open Insider Buy/Sell Ratio was unchanged at a neutral 38.5.
- This week’s contrarian AAII bear/bull ratio saw an increase in bears and bulls, remaining neutral (32.77/35.43) with Investors Intelligence Bear/Bull Ratio at a bearish 18.5/50.0 (contrary indicator) as a few advisors left the bull camp.
- Valuation finds the forward 12-month consensus earnings estimate from Bloomberg dipping to $207.10 for the SPX. As such, the SPX forward multiple is 219 with the “rule of 20” finding fair value at approximately 18.7.
- The SPX forward earnings yield is 4.57%.
- The 10-year treasury yield dipped to 1.29%. We view resistance as 1.4% with support at 1.23%. We reiterate the recent shift of the 10-year yield into a higher trading range could cause some issues for the markets.
In conclusion, nothing occurred yesterday on the charts or data to cause a change in our current “neutral/positive” macro-outlook for equities.
SPX: 4,440/NA DJI: 35,000/35,495 COMPQX: 14,823/NA NDX: 15,139/NA
DJT: 14,692/14,952 MID: 2,710/2,780 RTY: 2,200/2,300 VALUA: 9,553/9,835
S&P 500
Dow Jones Industrials
NASDAQ Composite
NASDAQ 100
Dow Jones Transports
S&P Midcap 4000
Russell 2000
