Index Performance Splits
Guy S. Ortmann, CMT | Nov 30, 2017 10:11AM ET
Opinion
The indexes closed mixed yesterday with some notably contrasting performance. Internals were positive on the NYSE and negative on the NASDAQ as volumes rose on both exchanges from the prior session. Some new closing highs were registered on some of the charts while others saw notable declines. However, no trend lines or support levels were violated as a result of their weakness. The data is unavailable this morning leaving our analysis focused on the charts. As such, we now find all of the indexes in near term uptrends and are of the opinion said trends should still be respected until proven otherwise.
- On the charts, there was a combination of notable strength and notable weakness during yesterday’s action. On the positive side, NYSE internals were positive on higher volume taking the DJI (page 2), DJT (page 4), MID (page 4), RTY (page 5) and VALUA (page 5) to new closing highs. The DJT was particularly strong having its largest single day gain of the year that broke above resistance while turning its near term trend to positive from neutral. On the negative side, NASDAQ internals were negative on higher volume resulting in notable declines on the COMPQX (page 3) and NDX (page 3). Volumes were heavy as talk of sector rotation was bantered about. However, we would note that in spite of the negative performance, the COMPQX remains above its near term uptrend line while the NDX closed on support and its short term uptrend line. The NDX did flash a “bearish stochastic crossover” signal but would not become actionable unless support is violated. Given the intensity of the selling in the COMPQX and NDX, it’s difficult to say whether or not this was a one day event or the beginning of actual sector rotation. So, guided by our technical discipline, we will wait for a formal signal from the charts before becoming more cautious for those two indexes.
- In conclusion, with no data available this morning, we are relying on the charts for our outlook that suggests, with all of the indexes in near term uptrends as are the cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ, the current positive trends should be respected until proven otherwise.
- Forward 12-month earnings estimates for the SPX from Bloomberg of $140.60 leave a 5.46 forward earnings yield on a 18.7 forward multiple.
- SPX: 2,589/NA
- DJI: 23,427/NA
- NASDAQ: 6,759/NA
- NDX: 6,292/NA
- DJT: 9,750/NA
- MID: 1,825/NA
- Russell: 1,500/NA
- VALUA: 5,837/NA
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