Data Mostly NeutralOpinion
Most of the indexes closed lower yesterday with negative internals on both the NYSE and NASDAQ. Volumes were flat on the NYSE versus the prior session while NASDAQ volumes dipped. No technical events of import were registered on the charts although two of the indexes did test support. The data remains mostly neutral. Thus we are maintaining our near term “neutral” outlook for the major equity indexes.
- On the charts, the only index that managed to post a gain yesterday was the DJI (page 2). The rest declined on the session. No new major signals were given although the MID (page 4) and RTY (page 4) did test support but managed to hold. So we still find only the SPX (page 2) and DJI remaining in their short term uptrends while the rest are neutral. We would reiterate our observation that the NASDAQ is on a “bearish divergence signal” (page 9) as the COMPQX (page 3) remains in an uptrend while its advance/decline line is negative. Its breadth foundation continues to erode. While a NASDAQ bearish divergence may not have the same level of prescience as that for a NYSE signal, it is not a healthy dynamic.
- The data is mostly neutral with a few mixed signals. All of the McClellan OB/OS Oscillators remain in neutral territory (All Exchange:-7.04/+23.42 NYSE:-9.54/+39.88 NASDAQ:-3.35/+9.48) as is the Equity Put/Call Ratio at 0.69. Both the Total (contrary indicator) and OEX Put/Call Ratios are bullish at 1.09 and 0.9. However, the Openinsider Buy/Sell Ratio, while remaining neutral, does continue to display increasing levels of insider selling as it has dipped to 28.1 from its prior 29.7 reading. So the data, as a whole, is non-directive in its current stages.
- In conclusion, while the bearish divergence on the NASDAQ is of some concern, the charts and data, in our opinion, continue to suggest a “neutral” near term outlook for the major equity indexes is most appropriate at this point in time.