Short Term Outlook Remains “Neutral/Positive”
Opinion: The indexes closed mixed Friday with negative internals on the NYSE and mixed internals for the NASDAQ. Volumes rose on the NYSE and declined on the MNASDAQ from the prior session. No technical signals of import were generated on the charts while the data remains largely in the neutral camp. Thus our near term outlook remains “neutral/positive” for the indexes while historically high valuation keeps the intermediate term view at “neutral”.
· On the charts, The SPX (page 2), DJI (page 2), COMPQX (page 3), RUT (page 4) and VALUA (page 5) closed lower on the day with the DJT (page 3) and MID (page 4) posting modest gains. Internals were negative on the NYSE with higher volume while the NASDAQ internals were mixed on lower volume. There were no technical events of import generated on the charts as all remain within their current sideways/positive trends.
· The data remains almost completely neutral including all of the McClellan OB/OS Oscillators (All Exchange:-20.23/+31.88 NYSE:-28.24//+36.64 NASDAQ:-12.02/+27.61). The Total and Equity Put/Call Ratios are neutral at 0.84 and 0.60 respectively along with the WST Ratio and its Composite at 53.2/132.7. The OEX Put/Call Ratio (smart money) remains a very bullish 0.38 while the Gambill Insider Buy/Sell Ratio remains neutral at 14.1. As such, the data continues to lack a strong implication as to near term market trajectory.
· In conclusion, the charts and data continue to send a “neutral/positive” outlook, by our work, for the near term. Extended historical valuation for the SPX keeps our intermediate term outlook at “neutral”.
· Forward 12 month earnings estimates for the SPX from IBES of $127.23 leave a 5.83% forward earnings yield on a 17.2 forward multiple.
SPX: 2,160/NA
DJI: 18,374/NA
COMPQX: 5,160/NA
DJT: 7,795/7,974
MID: 1,534/NA
RUT: 1,199/1,244
VALUA: 4,811/4,939