Data Remains MixedOpinion
All of the indexes closed higher Monday with positive internals on the NYSE and NASDAQ as volumes declined from the prior session on both exchanges. The charts improved further as several near term resistance levels were violated although more remain ahead. Some improvement was also seen in cumulative breadth. The data is mixed and not sending any particularly strong signals. So although we continue to be encouraged by the recent action, from a strictly technical standpoint, the charts and data remain neutral, causing us to maintain our “neutral” near term outlook for the major equity indexes in place.
- On the charts, all of the indexes closed higher yesterday with positive internals. The SPX (page 2), COMPQX (page 3), NDX (page 3), MID (page 4) and VALUA (page 5) all closed above their near term resistance levels which are adjusted below. The RTY closed at resistance. Breadth has improved as the cumulative advance/decline lines for the All Exchange and NYSE have turned neutral from negative while the NASDAQ A/D is now positive and back above its 50 DMA. None of the stochastic levels are in overbought territory. Yet we would note new resistance levels now present new barriers to be overcome.
- The data is mixed. All of the McClellan OB/OS Oscillators remain neutral (All Exchange:+33.79/-1.56 NYSE:+31.59/+0.75 NASDAQ:+37.46/+0.49). The fact that they have not reached overbought levels as a result of recent strength is a positive. The Total and OEX Put/Call Ratios are bullish at 1.0 and 0.63 respectively while the Equity P/C is a mildly bearish 0.55. The Open-Insider Buy/Sell Ratio is a neutral 30.1.
- In conclusion, while we are encouraged regarding the recent market action and data levels, from a strictly technical standpoint, our discipline requires us to maintain our near term “neutral” outlook for the major equity indexes intact.