Data Is Neutral
Opinion
All of the indexes closed higher Thursday with positive internals on the NYSE and NASDAQ as volumes rose from the prior session. No resistance levels or near term trends were violated, leaving all of the index trends unchanged and a mix of positive and neutral. One potentially bullish signal was generated on the NDX discussed below. The data is essentially neutral across the board, yielding no strong directional implications. As such, we remain of the opinion that the current trends of the various indexes should be respected on their own individual merits until proven otherwise.
- On the charts, all of the indexes closed higher yesterday with positive internals and higher volumes on the NYSE and NASDAQ. No critical technical events were generated on the charts leaving the near term trends of the NDX (page 3) and RTY (page 5) neutral while the rest remain in near term uptrends. The only technical event occurring yesterday that may be worth noting was the NDX flashing a bullish stochastic crossover signal from an oversold level that may suggest that index could challenge its resistance level over the near term. As noted in our recent reports, the NDX was suffering from some high volume selling pressure over the past several sessions that were a cause of some technical concern. Should resistance be violated, some of that concern would likely be moderated. Overall market breath has yet to improve, however, as the cumulative advance/decline lines for the All Exchange and NASDAQ remain negative and below their 50 DMAs. The NYSE a/d is neutral and above its 50 DMA.
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- The data is almost entirely neutral including all of the McClellan OB/OS Oscillators (All Exchange:-11.84/+17.0 NYSE:-2.21/+27.02 NASDAQ:-21.13/+11.32). The Total (0.84), Equity (0.58) and OEX (1.04) Put/Call Ratios are all neutral as is the Open Insider Buy/Sell Ratio at 32.2.
- In conclusion, while valuation remains a concern near its historic highs and market breadth needs improvement, we remain of the opinion that each of the major equity indexes discussed should be respected for their own individual near term trends, that are generally positive, until proven otherwise.