Data Unavailable
Opinion: All of the indexes closed lower yesterday with negative internals as volumes rose from the prior session registering another day of institutional distribution. More weakness was seen in the charts. While the data is unavailable this morning, the chart setup keeps us in our near term “neutral/negative” outlook for the indexes. Forward valuation for the SPX remains historically elevated and keeps our intermediate term outlook at “neutral”.
- On the charts, all of the indexes closed lower yesterday with broadly negative internals as volumes rose from the prior up session, thus implying another day of institutional distribution. More technical weakness was registered in the following manor. The SPX (page 2), MID (page 4) and RUT (page 4) all closed below their intermediate term uptrend lines. The COMPQX (page 3) closed below near term support and its 50 DMA. As well, the RUT closed back below its long term downtrend line from June of last year. Only the COMPQX stochastic level is oversold at this point, leaving the rest in neutral territory. As such, we have yet to see any technical signals suggesting a resumption of strength as imminent for the indexes.
- The data is unavailable this morning with the exception of the WST Ratio and its Composite that are both neutral at 47.7 and 132.0 respectively. There is no opposition to the chart messages coming from the data at this point.
- In conclusion, the charts continue to display near term weakness on increased volume while the data has yet to conflict with the chart messages. We remain near term “neutral/negative”.
- For the intermediate term, we remain “neutral” as the forward 12 month p/e based on IBES forward 12 month earnings estimates for the SPX leaves a market multiple near the level seen prior to the January correction.
- Forward 12 month earnings estimates for the SPX from IBES of $123.42 leave a 5.98% forward earnings yield on a 16.7 forward multiple.
SPX: 2,044/2,091
DJI: 17,700/18,112
COMPQX; 4,716/4,888
DJT: 7,747/8,088
MID: 1,451/1,491
RUT: 1,107/1,162
VALUA: 4,550/4,741