Bitcoin price today: subdued below $89k amid risk-off mood; key US data awaited
Data Mostly Neutral
Opinion: All of the indexes closed higher yesterday with positive breadth and strong volume. The charts saw multiple bullish technical achievements while the data remains largely neutral turning the short term outlook to bullish versus its prior neutral rating. The intermediate term remains a concern regarding valuation as the forward 12 month earnings estimates form First Call have dropped to $122.68.
- On the charts, there was nothing but bullish activity yesterday as all of the indexes closed higher with positive breadth and volume. The SPX (page 2) and DJI (page 2) both closed above resistance and their short term downtrend lines while the COMPQX (page 3) closed above resistance as well. New resistance levels have been adjusted (see below). The DJT (page 3) closed above resistance while the MID (page 4) and RUT (page 4) made new closing highs. Our only side note would be the DJT, MID and RUT are now well into overbought territory on their stochastic levels. However, said stochastics do not become actionable until reversal signals are triggered.
- The data remains largely neutral including the McClellan OB/OS Oscillators (NYSE: +17.44/+17.52 NASDAQ:+13.88/+4.04). The Equity Put/Call Ratio is a neutral .65. Yet the OEX Put/Call Ratio (smart money) still shows the pros long puts and expecting weakness at 1.46. As such the data is not showing any significant near term obstacles, in our view.
- The intermediate term still bothers us as sentiment remains extended with the new Investors Intelligence Bear/Bull Ratio (contrary indicator) showing the vast majority of advisors on the bullish side of the boat at 14.3/52.0 and the Rydex Ratio (contrary indicator) near a peak of leveraged ETF Trader bullish sentiment of 69.6.
- In addition, First Call has just reduced its forward 12 month earnings estimates for the SPX from $122.80 to $122.68 leaving market valuation back at a decade high of 17.1X forward estimates. As such, sentiment and valuation leave us concerned for the intermediate term.
- For the longer term, we remain bullish on equities as they remain comparatively undervalued with a 5.84% forward earnings yield for the SPX based on 12 month IBES forward earnings estimates of $122.68 versus the 10 Year Treasury yield of 1.95%.
SPX: 2,064/2,109
DJI: 17,642/18,130
COMPQX: 4,813/4,988
DJT: 8,912/9,182
MID: 1,485/???
RUT: 1,219/???