Data Largely Neutral
The bulk of the indexes closed lower Monday with negative internals on the NYSE and NSADQ as NYSE volumes rose from the prior session while those on the NASDAQ declined. No support or resistance levels were violated on the charts although one more index changed trend from positive to neutral. The data remains largely neutral as well. So in spite of the weak futures this morning, we have yet to see enough actual hard evidence appear to cause a shift in our current near term “neutral/positive” outlook for the major equity indexes.
- On the charts, all of the indexes closed lower yesterday with the one exception of the DJI (page 3) posting a minor gain. Internals were negative on the NYSE and NASDAQ with varying degrees of volume. The only technical event worthy of note was the MID (page 4) closing below its near term uptrend line. As such, we now find the near term trends for the indexes evenly split with the SPX (page 2), DJI (page 2), COMPQX (page 3) and NDX (page 3) in uptrends while the DJT (page 4), MID, RTY (page 5) and VALUA (page 5) are neutral. The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ are neutral and above their 50 DMAs.
- The data remains largely neutral including all of the McClellan OB/OS Oscillators (All Exchange:+7.2/-21.6 NYSE:+24.4/-21.17 NASDAQ:-7.06/-23.48). The OEX Put/Call Ratio (1.04) and OpenInsider Buy/Sell Ratio (36.2) are neutral as well. And while we now find the AAII Bear/Bull Ratio (contrary indicator) showing more bears than bulls at 36.0/32.67, it remains in neutral territory as well. Valuation finds consensus forward 12 month earnings estimates for the SPX of $167.61 leaving the forward 12 month p/e for the SPX at 16.7 versus the “rule of 20” implied fair value at a 17.1 multiple and a 5.99% earnings yield.
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- In conclusion, while we have seen some shifts to neutral on the charts over the past couple of sessions, we have not yet seen enough evidence presented on the charts and data to alter our near term “neutral/positive” outlook for the major equity indexes.
- SPX: 2,741/2,813
- DJI: 24,300/25,163
- NASDAQ: 7,691/NA
- NDX: 7,199/NA
- DJT: 10,436/10,771
- MID: 1,968/2,008
- Russell: 1,654/1,712
- VALUA: 6,365/6,487