Indexes Close Mixed
Guy S. Ortmann, CMT | Mar 26, 2019 11:33AM ET
Data Mostly Neutral
The indexes closed mixed yesterday with mixed internals on the NYSE and NASDAQ as volumes declined on both exchanges from the prior session. While a few more cautionary signs appeared on the charts, they were not sufficient to alter our near term outlook of “neutral”. The data is largely neutral as well.
On the charts, the indexes closed mixed with the DJI (page 2), MID (page 4), RTY (page 5) and VALUA (page 5) closing higher on the day as the rest posted minor losses.
- While breadth was positive, up/down volumes were negative, continuing the mixed character of the session.
- A few more cautionary events appeared with the COMPQX (page 3), NDX (page 3) flashing “bearish crossover” signals while the DJT (page 4) closed below support.
- The short term trends remain mixed with the SPX, DJI, COMPQX, NDX, and VALUA neutral and the balance negative.
- The cumulative advance/decline lines for the All Exchange, NYSE and NASDAQ remain neutral and above their 50 DMAs.
The data is mostly neutral. The 1 day McClellan OB/OS Oscillators are mostly neutral with the exceptions of the All Exchange (-51.06) and NASDAQ (-54.92) mildly oversold.
- The Open Insider Buy/Sell Ratio (60.4), detrended Rydex Ratio (0.19) and % of SPX stocks trading above their 50 DMAs (60.0) are all neutral as is the new AAII Bear/Bull Ratio at 26.67/35.33.
- Valuation has improved a bit with the spread between the forward p/e for the SPX based on Bloomberg forward 12 month consensus earnings estimates of $166.72 versus the “rule of 20” fair valuation at 16.8 versus 17.6. However, we would note the improvement has come simply from the yield on the 10 year Treasury dropping faster than the decline in forward earnings estimates that continue to shrink.
- The slow but steady pullback of forward earnings estimates over the past several weeks remains a concern.
In conclusion, the current set up of the charts and data discussed above suggest we should maintain our current near term “neutral” outlook for the major equity indexes in place for now..
- SPX: 2,795/2,864
- DJI: 25,444/26,047
- Nasdaq 7,599/7,879
- NDX: 7,197/7,525
- DJT: 9,875/10,262
- MID: 1,835/1,908
- Russell: 1,481/1,549
- VALUA: 6,045/6,226
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