Data Mostly Neutral
The bulk of the indexes closed lower Friday with the one exception of the DJT. Internals were negative in the NYSE and NASDAQ as volumes declined from the prior session. Most closed at the lower end of their intraday range. However, no support levels were violated, leaving the near term trends a combination of neutral and positive patterns. The data is largely neutral yielding no strong near term directional signals. As such, we remain “neutral/positive in our near term outlook for the major equity indexes.
- On the charts, the only index to close higher Friday was the DJT (page 4). The rest closed lower on the day with negative breadth. However, overall volumes were rather tepid when compared to the past several sessions. No important technical events occurred on the charts although the MID (page 4) did close back below its 50 DMA. So we find the RTY (page 5) and VALUA (page 5) in short term uptrends with the remainder in neutral sideways patterns. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain positive and above their 50 DMAs.
- The data is mostly neutral including all of the McClellan OB/OS Oscillators (All Exchange:+20.73/-15.85 NYSE:+18.52/-9.4 NASDAQ:+20.47/-21.7). The Equity Put/Call Ratio (0.66) and OpenInsider Buy/Sell Ratio (39.8) are neutral as well while the Total Put/;Call Ratio (contrary indicator) is a bullish 0.98 being counterbalanced by a bearish OEX Put/Call Ratio finding the pros remain long puts at 1.46. The forward p/e for the SPX based on forward 12 month consensus earnings estimates is at a 16.5 multiple versus the “rule of 20” fair value calculation of a 17.2 multiple.
- In conclusion, there has not been enough of a shift in either direction on the charts or data to cause us to alter our near term “neutral/positive” outlook for the major equity indexes.
- Forward 12-month earnings estimates for the SPX from Bloomberg are $161.07 leaving a 6.06% forward earnings yield on a 16.5 forward multiple.
- : 2,581/2,671
- : 23,487/24,634
- : 6,944/7,254
- : 6,304/6,659
- : 10,125/10,571
- : 1,838/1,914
- : 1,532/1,576
- VALUA: 5,859/6,108