No Change In Near Term Trends
Opinion: The indexes closed mixed yesterday with positive internals on the NYSE while NASDAQ internals were negative. NYSE volumes were flat versus the prior session with NASDAQ volume increasing. There were no notable technical events on the charts, leaving the near term trends intact as well as those for the cumulative advance/decline lines. The data is mixed, giving no strong near term implications. As such, and in spite of what appears to be extended valuation, we remain of the opinion that the near term trends of the indexes should be respected until proven otherwise.
- On the charts, the SPX (page 2), DJI (page 2) and DJT (page 4) closed higher yesterday with the rest posting losses. Internals were split with the NYSE’s positive and the NASDAQ’s negative. None of the near term trends were violated with the DJT, RTY (page 5) and VALUA (page 5) neutral and the rest positive. However, breadth is less than thrilling as the cumulative advance/decline lines for the All Exchange and NYSE are neutral and the NASDAQ’s negative. They reveal the selectivity regarding the number of participants trending higher.
- The McClellan OB/OS Oscillators are basically neutral including all but the NASDAQ 1 day that is mildly oversold (All Exchange:-39.77/-8.91 NYSE:-29.88/+9.76 NASDAQ:-50.27/-23.17). The Put/Call Ratios are split with the Total and Equity (contrary indicators) bullish at 0.95 and 0.71 while the OEX is a bearish 1.58. The Open Insider Buy/Sell Ratio remains neutral at 34.6.
- In conclusion, breadth remains selective while valuation appears extended. Yet until we see a violation of the current near term trends for the indexes, we suggest they continue to be respected.
- Forward 12 month earnings estimates for the SPX from Bloomberg of $136.79 leave a 5.35 forward earnings yield on a 18.9 8orward multiple, a 15 year high.
SPX: 2,547/NA
DJI: 22,774/NA
COMPQX; 6,557/NA
NDX: 5,994/NA
DJT: 9,542/9,986
MID: 1,810/NA
RTY: 1,450/1,512
VALUA: 5,646/5,843