Data remains Balanced
Opinion
All of the indexes closed higher yesterday with positive internals. However, volumes declined from the prior session. All closed at or near their respective intraday highs. No major events occurred on the charts but a few more “bearish stochastic crossover” signals were generated. The data remains fairly evenly balanced and has yet to suggest a high probability move in either direction over the near term. As such, our near-term outlook continues to be “neutral/positive” while historically high valuation keeps our intermediate term view at “neutral”.
- On the charts, all of the indexes closed higher yesterday with positive internals. However, the decline in trading volume took some shine off of the advances as it implies a dampening of demand on the session. No resistance or support levels were violated, thus leaving the near term mildly positive trends intact. We did see a few more “bearish stochastic crossover” signals generated, this time on the DJI (page 2), COMPQX (page 3) and VALUA (page 5). They followed similar signals on the SPX (page 2), MID (page 4) and RUT (page 4) during the prior session as noted in yesterday’s comments. Again, we reiterate that said signals should be used only for confirmation. As no support levels on the indexes have been violated to date, we do not consider them actionable at this stage.
- The data scales remain quite evenly balanced, yielding no high probability implication, either up or down, for the indexes over the near term. All of the McClellan OB/OS Oscillators remain neutral (All Exchange:-5.22/+30.02 NYSE:-7.37/+37.80 NASDAQ:-4.6/+21.64). The WST Ratio and its Composite are neutral at 59.4 and 138.3 respectively along with the new AAII Bear/Bull Ratio at 26.36/35.56. The Total and Equity Put/Call Ratios (contrary indicators) counterbalance each other at 0.86 (mildly bullish) and 0.54 (mildly bearish) while the Gambill Insider Buy/Sell Ratio remains a neutral 13.2. The OEX Put/Call Ratio (smart money) is a very bullish 0.43 with the pros very long calls and expecting some strength. However, this data point’s prescience has lost some of its luster of late.
- In conclusion, we have yet to see the weight of the evidence shift enough to alter our near term “neutral/positive” and intermediate term “neutral” views for the major indexes.