Data Mostly NeutralOpinion
The indexes closed mixed Friday with positive internals on the NYSE while those on the NASDAQ were mixed as breadth was slightly positive but up/down volumes were negative. Overall trading volumes declined on both exchanges versus those of the prior session. Little of technical import occurred on the charts, leaving most in sideways patterns while the data continues to project a neutral message for the near term. As such, we believe the weight of the evidence continues to suggest a near term “neutral” outlook for the major equity indexes as the most probable.
- On the charts, the indexes closed mixed on lighter volume with the SPX (page 2), COMPQX (page 3), NDX (page 3) and DJT (page 4) closing higher as the rest posted losses on the session. The SPX did manage to close above its short term downtrend line, turning its trend to neutral, while the MID (page 4) dipped back below its 50 DMA. So we now find all of the indexes in neutral sideways patterns with the exception of the DJI (page 2) remaining negative. All of the cumulative advance/decline lines remain neutral as well with the NASDAQ’s still below its 50 DMA.
- The data remains largely neutral as well including all of the McClellan OB/OS Oscillators (All Exchange-3.97/+32.28 NYSE:+2.18/+42.96 NASDDAQ:-11.32/+23.93). The Equity (0.64) and OEX (1.17) Put/Call Ratios are neutral along with the OpenInsider Buy/sell Ratio at 47.3. The Total Put/Call Ratio is a mildly bullish 0.88. Valuation finds the forward 12 month P/E for the SPX based on forward 12 month consensus earnings estimates from Bloomberg of $161.85 at a 16.5 multiple versus the “rule of 20” implied fair value of 17.0.
- In conclusion, the combination of chart trends combined with the data suggest our near term outlook for the major equity indexes should remain “neutral” at this point in time.
- SPX: 2,613/2,683
- DJI: 23,825/24,690
- NASDAQ: 6,959/7,177
- NDX: 6,459/6,700
- DJT: 10,391/10,788
- MID: 1,873/1,912
- Russell: 1,545/1,595
- VALUA: 6,028/6,142