Data Remains Primarily Neutral
All of the indexes, with the exception of the RTY, closed higher Friday. NYSE internals were positive while those on the NASDAQ were negative. Volumes declined on both exchanges from the prior session. No technical events of import were generated on the charts while the data remains largely neutral as well. Thus we are maintaining our near term “neutral/positive” outlook for the major equity indexes at this time.
- On the charts, the only index to close lower Friday was the RTY (page 5) as the rest posted gains. NYSE internals were positive but those on the NASDAQ were negative. No technical events of note were generated. So we see the bulk of the indexes staying in short term neutral sideways patterns with the exceptions of the DJI (page 2) and DJT (page 4) remaining in uptrends. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ are neutral as well.
- The data is singing its same neutral song with all of the McClellan OB/OS Oscillators neutral (All Exchange:-16.46/+4.77 NYSE:-5.07/+25.12 NASDAQ:-27.59/-12.54). The equity Put/Call Ratio (0.56) and Open Insider Buy/Sell Ratio (43.0) are neutral as well with the Total P/C (0.97) and OEX P/C (0.95) bullish. The detrended Rydex Ratio (contrary vindicator) finds the leveraged ETF Traders leveraged long at a bearish 1.22. Valuation finds consensus forward 12 month earnings estimates for the SPX at $168.96, leaving the forward 12 month p/e for the SPX at 16.8 versus the “rule of 20” implied fair value of a 17.0 multiple. The “earrings yield” stands at 5.95%
- In conclusion, we have yet to see a shift in the evidence that would cause us to change our current “neutral/positive” outlook for the major equity indexes.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- NASDAQ: 7,589/7,821
- NDX: 7,233/7,405
- DJT: 10,769/11,100
- MID: 1,966/2,001
- Russell: 1,654/1,712
- VALUA: 6,365/6,487