Opinion: The indexes closed mostly lower Tuesday with the one exception of the DJT. Internals were negative on the NYSE and NASDAQ as volumes rose from the prior session. However, no technical events of import were registered on the charts while the data is a mixed bag with the McClellan 1 day OB/OS Oscillators moderating from their prior cautionary levels. As such, we remain “neutral/positive” in our near term outlook for the major equity indexes.
- On the charts, all of the indexes closed lower yesterday with the one exception of the DJT closing higher and back above its 50 DMA. Internals were negative on higher than prior volume. While all closed at or near their session lows, no support levels or near term uptrend lines were violated. So, all of the short term uptrend lines remain intact with all but the DJI (page 2) above their 50 DMAs. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain positive and above their 50 DMAs as well.
- The data is a mixed bag. However, the 1 day McClellan OB/OS Oscillators that were quite overbought and of concern as mentioned in yesterday’s note, have moderated to less onerous levels while the 21 day readings remain overbought (All Exchange:+50.0/+76.64 NYSE:+48.24/+79.94 NASDAQ:+52.96/+79.68). The put/call ratios are sending mixed signals with the Total P/C a mildly bullish 0.87, the Equity P/C a neutral 0.57 and the OEX P/C a bearish 2.26. The OpenInsider Buy/Sell Ratio remains a neutral 32.0.
- In conclusion, yesterday’s declines did not have a notable impact in the charts while the 1 day OB/OS Oscillator’s prior cautionary signals have moderated to more neutral readings. As such, we are maintaining our near term “neutral/positive” outlook for the major equity indexes.
- Forward 12 month earnings estimates for the SPX from Bloomberg are $157.83 leaving a 5.7% forward earnings yield on a 17.5 forward multiple.
- SPX: 2,723/2,799
- DJI: 24,883/25,705
- COMPQX; 7,374/NA
- NDX: 6,926/NA
- DJT: 10,475/10,761
- MID: 1,902/1,960
- RTY: 1,565/1,608
- VALUA: 6,105/6,251