Data Continues Largely Neutral Message
The bulk of the indexes closed higher Tuesday with the one exception of the DJT that had made a new closing high on the previous session. Internals were positive on the NYSE but negative on the NASDAQ as volumes rose on both exchanges from the prior session. No important technical events were registered on the charts while the data continues to send a generally neutral message. As such, at this point we see no reason to alter our current “neutral/positive” outlook for the major equity indexes.
- On the charts, all of the indexes closed higher yesterday with the one exception of the DJT (page 4) closing lower after making a new closing high on Monday. NYSE internals were positive but the COMPQX advance came on negative breadth and up/down volume, taking some of the shine off of the advance. No support/resistance levels were violated as the DJT and MID (page 4) remain in short term uptrends while the rest are currently neutral. The cumulative advance/decline lines remain negative for the All Exchange, NYSE and NASDAQ but all are still above their 50 DMAs. One minor positive event was registered on the VALUA (page 5) as it flashed a “bullish stochastic crossover signal”.
- The data continues to send a generally neutral message with all of the McClellan OB/OS Oscillators remaining neutral (All Exchange:-35.14/+19.95 NYSE:-40.58/+28.98 NASDAQ:-30.85/+15.22). The Equity Put/Call Ratio (0.61) and Open Insider Buy/sell Ratio (49.5) are neutral as well while the Total P/C (contrary indicator) and OEX P/C remain on bullish signals at 0.88 and 0.74 respectively. Valuation finds consensus forward 12-month earnings estimates for the SPX at $169.05, leaving the forward 12-month p/e for the SPX at 17.1 versus the “rule of 20” implied fair value of a 17.0 multiple. The “earrings yield” stands at 5.85%.
- In conclusion, given the current state of the charts and data, we feel it is appropriate to maintain our near term “neutral/positive” outlook for the major equity indexes for the present.
- SPX: 2,864/2,898
- DJI: 25,600/26,052
- NASDAQ: 7,891/8,108
- NDX: 7,400/7,579
- DJT: 11,222/11,442
- MID: 2,020/2,053
- Russell: 1,672/NA
- VALUA: 6,514/6,635