Bitcoin price today: ticks down below $90k amid risk-off mood; key US data awaited
Short Term Outlook Neutral
Opinion: All of the indexes closed higher yesterday and near their intraday highs. Breadth was positive as volumes rose on the NYSE but declined on the NASDAQ. There were a number of positive chart events. However, we are of the opinion that they were not enough to alter our concerns for the intermediate term. The short term outlook has turned back to neutral from neutral/positive given the state of the options data.
- On the charts, the indexes rose with good breadth and closed near their intraday highs. So, it was a positive day. Yet, even with the improvements, we believe they are not enough to shift our intermediate term view while turning near term neutral.
- The SPX (page 2) closed back above its 50 DMA but remains below resistance and within its current triangle pattern.
- The DJI (page 2) closed above its short term downtrend line but also remains below resistance.
- The NASDAQ (page 3) closed above its 50 DMA but below resistance and its downtrend line.
- The DJT (page 3) closed above its 50 DMA while the RUT (Page 4) closed above its 200 DMA yet both remain confined within their trading ranges.
- The MID (page 4) did manage to close above resistance that was the most important signal of the day, in our view.
- So while there were some positive events, for the vast majority, the improvements were not enough for us to get excited.
- Looking at the data, all of the McClellan OB/OS Oscillators are neutral (NYSE:+27.16/-9.24 NASDAQ:-0.13/-.08). The Total Put/Call Ratio (contrary indicator) has flipped to a bearish signal as the crowd loaded up on calls during the rally to .56 while the WST Ratio and its Composite are bearish at 62.4 and 154.1. The OEX and Equity Put/Call Ratios are neutral at 1.26 and .66 versus their bullish signals yesterday morning. So the data is fairly flat.
- In conclusion, we now see the near term outlook as neutral while all of the current downtrends remain intact. The intermediate term remains cautious as breadth remains pathetic, leverage remains elevated and up 9% y/y and the SPX is at 16.7X forward 12 month estimates, near its decade high.
- For the longer term, we remain bullish on equities as they remain comparatively undervalued with a 5.98% forward earnings yield for the SPX based on 12 month IBES forward earnings estimates of $125.68 versus the 10 Year Treasury yield of 2.24%.
SPX: 2,063/2,109
DJI: 17,376/17,795
COMPQX; 5,020/5,144
DJT: 8,178/8,444
MID: 1,482/1,515
RUT: 1,200/1,245