Data Remains Mostly NeutralOpinion
The indexes closed mostly higher Thursday with the one exception of the DJT. Internals were positive on both the NYSE and NASDAQ as NYSE volumes rose from the prior session while NASDAQ volumes declined. Three new closing highs were achieved on the charts, leaving all of the near term trends positive. The data is mostly neutral with a couple of positive signals. So while historically high valuation continues to be of some concern, the charts and data remain in a state suggesting the near term uptrends should continue to be respected.
- On the charts, the only index to close lower yesterday was the DJT (page 4). The rest advanced with the DJI (page 2), MID (page 4) and VALUA (page 5) posting new closing highs. Internal breadth was positive as volumes were tepid due to holiday trading. All of the near term uptrends remain intact with the NYSE and All Exchange cumulative advance/decline lines positive with the NASDAQ’s neutral. All are above their 50 DMAs.
- The data is mostly neutral with two positive signals. All of the McClellan OB/OS Oscillators are neutral (All Exchange:+23.76/+17.17 NYSE:+32.53/+40.03 NASDAQ:+12.74/-3.71) as are the Equity Put/Call Ratio (0.57) and OpenInsider Buy/Sell Ratio (47.3). The two positive signals are coming from the Total Put/Call Ratio (contrary indicator) at 1.11 with the crowd long puts while the OEX Put/Call Ratio finds the pros long calls at a bullish 0.74.
- In conclusion, our song remains the same. The current state of the charts and data continue to suggest the near term uptrends on the charts should continue to be respected until proven otherwise, in spite of historically high valuation.
- Forward 12-month earnings estimates for the SPX from Bloomberg of $140.60 leave a 5.31 forward earnings yield on an 19.1 forward multiple.
- SPX: 2,626/NA
- DJI: 24,318/NA
- NASDAQ: 6,826/NA
- NDX: 6,333/NA
- DJT: 10,340/NA
- MID: 1,883/NA
- Russell: 1,525/NA
- VALUA: 5,967/NA