Data MixedOpinion
All of the indexes closed higher Friday with positive internals on the NYSE and NASDAQ as volumes rose on both exchanges from the prior session. Several new closing highs were achieved on the charts, leaving all of the near term uptrend lines intact. The data is mixed and not sending any particularly strong near term implications. As such, and in spite of historically high valuation, we remain of the opinion that the near term uptrends of the indexes should continue to be respected until proven otherwise.
- On the charts, all of the indexes closed higher Friday with positive internals on higher volume. New closing highs were achieved on the SPX (page 2), COMPQX (page 3), DJT (page 3), MID (page 4), RTY (page 4) and VALUA (page 5). All of the short term uptrend lines remain intact as do those for the cumulative advance/decline lines for the NYSE and NASDAQ.
- The data is mixed. The All Exchange and NYSE 1-day McClellan OB/OS Oscillators are neutral while the rest are in overbought territory (All Exchange: +49.15/+82.71 NYSE:+42.16/+92.47 NASDAQ:+62.15/79.69). The Equity Put/Call Ratio is neutral at 0.59 while the Total (contrary indicator) and OEX Put/Call Ratios are bullish at 1.05 and 0.52 respectively. The Open Insider Buy/Sell Ratio remains neutral at 32.3. So the fairly mixed readings on the data dashboard are not suggesting any strong near term propensities for the markets at this point.
- In conclusion, while we remain concerned regarding historically high forward valuation for the SPX, we remain of the opinion that the near term trends of the major indexes should continue to be respected until proven otherwise.
- Forward 12-month earnings estimates for the SPX from Bloomberg of $137.37 leave a 5.56 forward earnings yield on a 18.3 forward multiple, over a decade high.
- SPX: 2,475/NA
- DJI: 22,047/NA
- NASDAQ: 6,361/NA
- DJT: 9,542/NA
- MID: 1,740/NA
- Russell: 1,450/NA
- VALUA: 5,646/NA