DJT Chart Weakens Slightly
Opinion
The indexes closed mixed Thursday with mixed internals on both the NYSE and NASDAQ exchanges. Volumes were flat on the NYSE versus the prior session while NASDQ volumes dipped. The DJT chart weakened a bit but the rest of the indexes remain in their near term uptrends. The data is sending some mixed signals but is inconclusive regarding near term probabilities for the markets. As such, we are maintaining our near term “neutral/positive” outlook for the major equity indexes in general.
- On the charts, the indexes closed mixed with the RTY (page 4) and VALUA (page 5) declining while the rest rose by the close with the COMPQX (page 3) making another new closing high. The DJT (page 3) weakened a bit, in spite of its gains, as it remains below it 50 DMA and closed marginally below its short term uptrend line. We would also note the DJT flashing a “bearish stochastic crossover” signal that suggests some near term caution. The balance of the indexes remain in their short term uptrends while cumulative breadth remains positive on the All Exchange, NYSE and NASDAQ.
- The data is mixed as are the McClellan OB/OS Oscillators (All Exchange:+54.67/+52.36 NYSE:+40.85/+65.58 NASDAQ:+61.42/+27.1). The All Exchange 1 day, is mildly overbought while the NYSE 1 day is neutral and the NASDAQ 1 day is overbought. The crowd has become a bit more nervous according to the Total and Equity Put/Call Ratios (contrary indicators) that have risen to bullish signals at v0.92 and 0.72 while the OEX Put/Call Ratio finds the pros extremely weighted in puts at a very bearish 3.95. The Openinsider Buy/Sell Ratio shows insiders neutral at 36.9. As such, there is no real consensus coming from the data regarding near term market propensities.
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- In conclusion, although the markets remain near historically high forward valuation with a 17.8 forward multiple on the SPX, based on forward 12-month IBES earnings estimates, and advisor sentiment is very complacent, there is not enough change in the charts or data at this time to cause a shift in our current near term “neutral/positive” outlook for the indexes.