Data Mostly NeutralOpinion
The indexes closed mixed Friday with mixed internals on the NSYE as volumes there dipped while NASDAQ internals were negative on higher volume. Two more indexes saw their near term uptrend lines violated. The data is almost entirely neutral. As such, we are maintaining our near term “neutral/positive” outlook for the major equity indexes in place at this point in time.
- On the charts, the indexes closed mixed Friday with generally mixed to negative internals. The DJT (page 4) and RTY (page 5) were the only two to post gains as the RTY made another new closing high. Both the SPX (page 2) and COMPQX (page 3) closed below their near term uptrend lines, changing their trends to neutral from positive. So the index trends now are evenly split with the NDX (page 3), MID (page 4), RTY (page 5) and VALUA (page 5) still in short term uptrends with the rest now neutral. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain positive and above their 50 DMAs while the bulk of the stochastic levels remain overbought. Yet the NDX is the only one to have flashed a bearish stochastic crossover at this point.
- The data is almost entirely neutral including all of the McClellan OB/OS Oscillators (All Exchange:+34.69/+24.39 NYSE:+26.85/+27.5 NASDAQ:+42.85/+23.52). The Equity (0.66) and OEX (1.0) Put/Call Ratios are also neutral as is the OpenInsider Buy/Sell Ratio at 41.5. The Total Put/Call Ratio (contrary indicator) is bullish at 1.03. Valuation finds the forward 12 month P/E for the SPX based on forward 12 month consensus earnings estimates from Bloomberg of $163.01 at a 16.6 multiple versus the “rule of 20” implied fair value of 16.9.
- In conclusion, while the futures are indicating a strong open, given the current state of the charts and data, we are maintaining our near term “neutral/positive” outlook for the major equity indexes in place for the present.
- SPX: 2,671/2,741
- DJI: 24,357/24,963
- NASDAQ: 7,140/7,415
- NDX: 6,769/7,017
- DJT: 10,416/10,767
- MID: 1,901/1,950
- Russell: 1,579/NA
- VALUA: 6,124/6,288