Data Mixed
Opinion: Most of the indexes closed higher yesterday, with the exception of the COMPQX. Volumes rose versus the prior session while internals were positive on the NYSE but negative on the NASDAQ. The intraday swings left the charts intact but some conflicting signals were generated as discussed below. The data is mixed as well. While interesting developments occurred on the gold, U.S. Treasury and U.S. dollar charts, our net takeaway is the short term outlook remains neutral for the major equity indexes. The intermediate term remains cautious as we have yet to see significant evidence to alter our current view.
- On the charts, only the COMPQX (page 3) closed lower yesterday as the NASDAQ produced negative internals. The intraday swings produced some interesting developments as follows. The SPX (page 2) tested support and formed a “hammer”, strengthening support. The COMPQX (page 3) was below its short term uptrend line intraday but closed back above. The MID (page 4) also formed a “hammer” along with the RUT (page 4) that also tested support. The VALUA (page 5) tested support as well. So the day seemed to validate the indexes attempting to form a near term bottom. However, some caution has entered the picture as the stochastic levels for the SPX, DJT and MID have crossed back below their 80 signal line implying a possible weakening of trend.
- We would note three other chart events as well. Gold, measured by the N:GLD ETF, closed above its 3 ½ year downtrend line as well as its 200 DMA with a significant uptick in volume suggesting gold may be seeing better days ahead. The U.S. dollar, measured by the N:UUP ETF, closed significantly lower while breaking support and its 200 DMA. It is not in a definitive downtrend but may resolve into some sideways trading. Finally, the yield on the 10 year Treasury formed a hammer bottom suggesting the 10 year may well have seen its peak in price yesterday.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
- The data is mixed with all of the 1 day McClellan OB/OS Oscillators neutral as the 21 day levels remain oversold. The OEX Put/Call Ratio (smart money) is neutral as well at 1.33. However, the WST Ratio and its Composite are on a “bear alert” signal at 74.6 and 185.2. This is being somewhat counterbalanced by the new Investors Intelligence Bear/Bull Ratio (contrary indicator) at 38.1/34.0.
- Forward 12 month earnings estimates for the SPX from IBES have been reduced from $124.43 to $123.13 resulting in a 6.44% forward earnings yield with a 15.5 forward multiple.
SPX: 1,875/1,949
DJI: 15,975/16,592
COMPQX; 4,418/4,644
DJT: 6,580/7,022
MID: 1,230/1,315
RUT: 982/1,052
VALUA: 3,888/4,070