Data Unavailable
Opinion: The indexes closed mixed yesterday with slightly positive internals as volumes declined from the prior session. No technical events of import were triggered while all of the current uptrends remain intact on improved breadth. The data is unavailable this morning with the exception of the WST Ratio which remains neutral. Given yesterday’s data that is likely little changed, we remain neutral for the short term given the extent of the recent rally and “neutral/positive” for the intermediate term given the notable improvement in market breadth. However, valuation is now approaching historically high levels that is worthy of note.
- On the charts, the large-cap indexes rose modestly yesterday while the small and mid-cap indexes declined slightly. Internals were slightly positive as volumes declined suggesting the markets took a bit of a breather. All of the current uptrends remain intact and no sell signals have been generated. Nonetheless, the extent of the virtually uninterrupted rally from the February lows has been of such magnitude that, in our opinion, the prime buying time is well behind us and suggestive of exercising discretion when considering new purchases at current levels, lending a neutral tone to our short term outlook.
- The data is unavailable with the exception of the WST Ratio and its Composite, both of which are neutral at 51.30 and 133.0 respectively. Given the modestly of yesterday’s action, we suspect yesterday’s data is likely little changed from its prior mixed level of signals. So the data, as well, is sitting in neutral territory.
- In conclusion, while all of the chart uptrends remain intact and the data is neutral, the extent and vertical nature of the current rally suggests discretion should be taken when considering new purchases within our current short term neutral opinion. The intermediate term outlook remains “neutral/positive” as the A/D lines for all of the exchanges continue their upward trek and surpass their respective DMAs. The one caveat is valuation that is now beginning to approach the historically high levels seen at the end of last year and prior to the correction.
- Forward 12 month earnings estimates for the SPX from IBES of $123.27 leave a 6.01% forward earnings yield on a 16.6 forward multiple.
SPX: 2,005/2,076
DJI: 17,009/17,712
COMPQX; 4,715/4,924
DJT: 7,536/8,150
MID: 1,389/1,428
RUT: 1,035/1,107
VALUA: 4,320/4,586