Data MixedOpinion
The indexes closed mixed Wednesday with negative internals on the NYSE while NASDAQ internals were mixed. Volumes rose from the prior session on both exchanges. Tests of resistance on all of the charts failed as selling pressure late in the day left all at or near their intraday lows. The data is mixed. As such, we are maintaining our near term “neutral/positive” outlook in place for the major equity indexes.
- On the charts, the indexes closed mixed yesterday with the NDX (page 3), DJT (page 4) and RTY (page 5) closing slightly higher as the rest declined. Internals were negative on the NYSE while NASDAQ breadth was positive but up/down volume negative. Virtually all of the indexes tested their near term resistance levels during the day but all failed to violate as late session selling pushed prices down to at or near their intraday lows. We would not view this action as necessarily negative. In fact, it is not uncommon to see this type of action post a significant selloff as seen a few weeks ago. It is rare for such resistance levels to be violated on the first attempt. Frequently it will take a few to several attempts before said resistance can be overcome. We would view it as part of a normal stabilization process post a period of high volatility. We would note no support levels were violated although the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ slipped to neutral and below their 50 DMAs.
- The data is mixed. All of the McClellan OB/OS Oscillators are neutral with the exception of the NYSE 21 day that is mildly oversold (All Exchange:+9.55/-43.1 NYSE:+6.31/-51.36 NASDAQ:+20.66/-42.53). The Equity Put/Call Ratio is a neutral 0.66 as is the OpenInsider Buy/Sell Ratio at 36.8.The new AAII Bear/Bull ratio remains neutral at 28.0/43.0 while the Total and OEX Put/Call Ratios are bullish at 1.06 and 0.8 respectively. Forward valuation of the SPX based on forward 12 month consensus earnings estimates from Bloomberg of $157.53 stands at a 17.1 forward multiple.
- In conclusion, we view yesterday’s swings as part of the sideways chop we have been expecting as the indexes try to normalize post a period of high volatility. We maintain our near term “neutral/positive” outlook.