Data Remains Mostly Neutral
The bulk of the indexes closed lower Tuesday with negative internals on the NYSE while those on the NASDAQ were mixed. Overall trading volumes rose from the prior session. While a couple of minor caution signals have appeared on the charts, all of the near term trends remain positive with the data remaining largely neutral in nature. As such, we are maintaining our near term “positive” outlook for the major equity indexes at this time in spite of the negative futures this morning.
- On the charts, all of the indexes closed lower yesterday with the one exception of the DJT (page 4) posting a gain. NYSE internals were negative but while the NASDAQ saw negative breadth, buying volume was greater than selling volume. No support levels or short term trends were registered. However, the DJI (page 2) and VALUA (page 5) gave “bearish stochastic crossover signals” as minor warnings. Yet said signals are not yet actionable as no support levels or trends have been violated. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain positive and above their 50 DMAs.
- The data remains largely neutral including all of the McClellan OB/OS Oscillators (All Exchange:-1.08/+36.79 NSYE-22.85/+36.8 NASDAQ:+18.95/+42.16). The Equity Put/Call Ratio (0.59), Open Insider Buy/Sell Ratio (35.7) and new AAII Bear/Bull Ratio (26.67/39.0) are neutral as well. The Total P/C (contrary indicator) at 0.85 is mildly bullish while the OEX P/C finds the pros very bullish and long calls at 0.5. Valuation finds consensus forward 12-month earnings estimates for the SPX at $169.00, leaving the forward 12-month p/e for the SPX at 17.1 versus the “rule of 20” implied fair value of a 17.1 multiple. The “earrings yield” stands at 5.83%.