Data UnavailableOpinion
All of the indexes closed higher Monday with broadly positive internals on the NYSE and NASDAQ as volumes dipped on both exchanges from the prior session. All closed at or near their intraday highs. No technical events of import were registered on the charts while the data is unavailable this morning. Nonetheless, we remain of the opinion that more bounce is left in the indexes given the extreme oversold levels of the stochastics on the SPX and NDX and their historical performance as noted in yesterday’s comments. Yet there is not enough evidence to suggest new uptrends have been initiated. As such, in spite of some near term strength expected, we remain “neutral” in our short term outlook for the major equity indexes.
- On the charts, all of the indexes closed higher yesterday with positive internals on the NYSE and NASDAQ. Volumes declined slightly from the prior session on both exchanges. While yesterday’s strength was notable, no technical events of import were registered on the charts as all of the near term resistance levels remain intact as do the near term downtrend lines, across the board. Regarding resistance, if current futures play out, the NDX (page 3) is likely to break resistance this morning. Yet all of the short term downtrend lines remain intact.
- We remain of the opinion, however, that the stochastic levels for the SPY (NYSE:SPY) and QQQ discussed yesterday may well be the most important indicators to consider at the moment. In spite of yesterday’s strength, all of the stochastics remain deeply oversold, both on the indexes as well as the ETFs. Given the fact that the SPY and QQQ have seen consistent rallies from these levels over the past year, three times on the SPY and six times on the QQQ, we believe there is a high probability of further strength ahead.
- Nonetheless, we need to see violations of resistance on the charts and indications of potential uptrends being ini8tiated before we can formally alter our near term “neutral” outlook.
- The data is unavailable.