Data Neutral
All of the indexes closed higher Tuesday with positive internals on the NYSE and NASDAQ as NYSE volumes fell from the prior session while those on the NASDAQ rose. Some of the charts saw some slight improvement, leaving the short term trends a mx of neutral and positive. The data is almost entirely neutral. So although the futures are pointing to a negative open this morning, we have not yet seen enough of a change in the charts and data to alter our current near term “positive” outlook for the major equity indexes.
- On the charts, all of the indexes closed higher yesterday with positive internals on the NYSE and NASDAQ. Slight improvements were seen on the MID (page 4), RTY (page 5) and VALUA (page 5) as the MID and RTY closed back above their 50 DMAs that had been violated at the close of Monday’s session. As well, The RTY and VALUA closed back abo0ve their short term uptrend lines, turning their trends back to positive from neural. So we find the SPX (page 2), DJI (page 2) and RTY in short term neutral sideways patterns with the rest short term trends positive. The cumulative advance/decline lines for the All Exchange and NYSE are neutral and above their 50 DMAs while the NASDAQ A/D is negative and below its 50 DMA.
- The data is almost entirely neutral including all of the McClellan OB/OS Oscillators (All Exchange:-13.31/+3.83 NYSE:-17.61/+18.12 NASDAQ:-7.94/-6.69). The Equity Put/Call Ratio (0.66), OEX P/C (1.14) and Open Insider Buy/Sell Ratio (37.3) are all neutral as well. The Total Put/Call Ratio (contrary indicator) is a mildly bullish 0.91. Valuation finds consensus forward 12 month earnings estimates for the SPX at $169.05, 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. The “earrings yield” stands at 5.95%.
- In conclusion, in spite of weak futures this morning, given the current state of the charts and data we are maintaining our near term “positive” outlook for the major equity indexes.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- NASDAQ: 7,786/7,936
- NDX: 7,294/7,507
- DJT: 10,925/11,254
- MID: 1,966/NA
- Russell: 1,654/1,712
- VALUA: 6,394/NA