Data Remains Largely Neutral
The indexes closed mixed Thursday with positive internals on the NYSE while the NASDAQ saw positive breadth but flat up/down volumes. Both exchanges saw an increase in overall volume from the preceding session. No major technical events of import were registered on the charts although two did see bearish stochastic crossover signals triggered. The net result was the current mix of neutral and positive short term chart trends continues while the data dashboard has a generally neutral tone. As such, we are maintaining our near term “neutral/positive” near term outlook for the major equity indexes.
- On the charts, the indexes closed mixed yesterday with generally positive internals on higher trading volume. The SPX (page 2), COMPOQX (page 3) and NDX (page 3) declined as the rest posted gains. The COMPQC and NDX did see “bearish stochastic crossover signals” appear. However, neither their near term uptrends nor support levels were violated, dampening the strength of the signal. Both the DJT (page 4) and VALUA (page 5) closed at their respective resistance levels. While not violated, if said resistance should be broken, it would turn their trends form neutral to positive. So the MID (page 4), RTY (page 5) and VALUA remain in neutral sideways patterns with the rest in uptrends. The cumulative advance/decline lines saw some improvement with the NYSE’s now positive and both the All Exchange and NASDAQ’s neutral. All are above their 50 DMAs.
- The data continues its largely neutral message including all of the McClellan OB/OS Oscillators (All Exchange:+28.5/-7.79 NYSE:+47.11/-1.29 NASDAQ:+12.65/-14.97). The Equity Put/Call Ratio (0.63), Total P/C (0.74) and OpenInsider Buy/sell Ratio (49.1) are neutral as well while the OEX Put/Call Ratio is a bullish 0.72 as the pros are now long calls, expecting some near term strength. 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 16.9 versus the “rule of 20” implied fair value of a 17.0 multiple and a 5.92% earnings yield.
- In conclusion, we have yet to see enough of a shift in the weight of the evidence that would cause a change from our current “neutral/positive” near-term outlook for the major equity indexes.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- Nasdaq: 7,748/NA
- NDX: 7,284/NA
- DJT: 10,623/10,940
- Mid: 1,968/2,008
- Russell: 1,654/1,712
- VALUA: 6,365/6,487