More New Closing Highs RegisteredOpinion
The bulk of the indexes closed higher yesterday with the one exception of the DJT. Internals were positive on the NYSE and NASDAQ as volumes declined from the prior session on both exchanges. Several more new closing highs were registered on the charts leaving the uptrends intact. However, all of the McClellan OB/OS Oscillators are now in overbought territory that now have the possibility of putting some salt on the tail of the rally. Yet in spite of the forward valuation of the SPX hitting another 15 year high, we remain of the opinion that the current uptrends of the various indexes should be respected until proven otherwise.
- On the charts, all of the indexes, except the DJT (page 3), closed higher yesterday with positive internals on lighter volume. More new closing highs were registered on the SPX (page 2), DJI (page 2), COMPQX (page 3), MID (page 4), RTY (page 4) and VALUA (page 5). All of the near term uptrend lines remain intact as do the cumulative advance/decline lines. One potential outlier may be seen on the SPX chart as it has risen to the “return line” which is the upper boundary of its up trending channel going back to last May. Moves to that line have typically resulted with some degree of retracement or consolidation of the moves that brought it to the top of the channel.
- The data is sending some caution signals in the form of all of the McClellan OB/OS Oscillators now being in overbought territory (All Exchange:+62.14/+80.51 NYSE:+50.66/+86.51 NASDAQ:+79.08/+80.9). While the NYSE one day is only mildly overbought, the rest are at levels suggestive of a pause/consolidation. Several of the psychology levels remain neutral including the AAII Bear/Bull Ratio (25.67/38.0) and Investors Intelligence Bear/Bull Ratio (17.1/54.3). The Total (contrary indicator) and OEX Put/Call Ratios are both bullish at 0.93 and 0.41 respectively while the Open Insider Buy/Sell Ratio remains neutral at 26.9.
- In conclusion, the charts continue to suggest the near term uptrends of the indexes should continue to be respected. However, the OB/OS levels and SPX return line imply some pause/consolidation may be forthcoming.