Data MixedOpinion
The indexes closed higher Friday with positive internals on the NYSE and NASDAQ as volumes declined from the prior session on both exchanges. Volumes declined on both from the prior session. Some technical improvements on the charts were registered as several closed above their near term resistance levels while the cumulative advance/decline lines improved as well. The data is mixed and inconclusive currently. As such, we are maintaining our near term “neutral/positive” outlook or the major equity indexes with the primary reason for not turning outright “positive” being the 1 day OB/OS levels improvement.
- On the charts, all of the indexes closed higher Friday with broadly positive internals wile volumes declined on both exchanges. All closed at or near their intraday highs. The SPX (page 2), DJI (page 2), COMPQX (page 3) and VALUA (page 5) all closed above their near term resistance levels. The SPX and DJI also managed to close back above their 50 DMAs. As well, the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ turned positive and are above their 50 DMAs. Short term trends for the SPX, DJI, COMPQX, NDX and VALUA are positive with the rest neutral.
- The data is a bit mixed. All of the McClellan OB/OS Oscillators are neutral with the exception of the NYSE 1 day slipping into overbought territory (All Exchange:+45.7/-33.65 NYSE:+51.78/-34.42 NSADAQ:+41.48/-28.13). The Total Put/Cal Ratio is a bullish 1.01 while the Equity and OEX P/Cs are neutral at 0.62 and 1.37 respectively. The OpenInsider Buy/Sell Ratio has tipped into negative territory for the first time in several months to 24.6 as they appear to have taken advantage of recent strength to lighten up on their holdings. Forward valuation of the SPX based on forward 12-month forward consensus earnings estimates stands at a 17.4 multiple with a 5.7% earnings yield.
- In conclusion, we are maintaining our near term “neutral/positive” outlook for the major equity indexes. While we expect some further progress to be made, it may be more difficult to achieve as the OB/OS oscillators have spent a good deal of their oversold fuel while insiders have picked up their selling, suggesting the “easy money” from the market lows may have already been made.