McClellan OB/OS Oscillators Remain Neutral
The indexes closed mixed Tuesday with mixed internals on the NYSE while NASDAQ internals were negative. Both traded higher volume than the preceding session. There was a combination of positive and negative technical evens on the charts but their mixed trends remain unchanged. The data continues to be relatively neutral in its near term projections for the major equity indexes. As such, we are maintaining our near term “neutral/positive” outlook for the major equity indexes at this point in time.
- On the charts, the indexes closed mixed yesterday with negative breadth but positive up/down volume on the NYSE while the NASDAQ saw both negative breadth and up/down volume. Both saw overall volumes rise from the prior session. The NDX (page 3), while closing near its intraday lows, managed to register a new closing high while the COMPQX (page 3) gave a warning signal as it registered a “bearish stochastic crossover”. However, we would note neither the COMPQX’s uptrend nor support were violated, dulling the crossover signal’s implications unless such violations occur. The SPX (page 2), DJI (page 2) and NDX closed higher with the rest posting losses as the he DJT (page 4) closed back below its 50 DMA. We also saw the cumulative advance/decline line for the NASDAQ turn negative but remains above its 50 DMA. The cumulative advance/decline lines for the All Exchange and NYSE remain neutral.
- The data remains largely neutral. All of the McClellan OB/OS Oscillators remain neutral (All Exchange:+8.76/-32.73 NYSE:+25.15/-30.1 NASDAQ:-4.86/-37.31) as are the Equity Put/Call Ratio (0.63), OpenInsider Buy/sell Ratio (43.5) and new AAII Bear/Bull Ratio (30.67/34.67). The Total P/C (contrary indicator) is a bullish 0.91 as is the OEX P/C that finds the pros back to being long calls at 0.62. Valuation finds consensus forward 12-month earnings estimates for the SPX of $167.91 leaving the forward 12 month p/e for the SPX at 16.8 versus the “rule of 20” implied fair value of a 17.1 multiple and a 5.95% earnings yield.
- In conclusion, while we continue to see some split performances on the charts and some minor deterioration in breadth, we do not feel enough evidence has been presented at this time to alter our current “neutral/positive” outlook for the major equity indexes..
- SPX: 2,790/2,839
- DJI: 24,761/25,377
- NASDAQ: 7,691/NA
- NDX: 7,284/NA
- DJT: 10,546/10,940
- MID: 1,968/2,008
- Russell: 1,654/1,712
- VALUA: 6,365/6,487