Guy S. Ortmann, CMT | Sep 02, 2020 09:53AM ET
Forward 1-year SPX Valuation Back At Peak Levels
The major equity indexes closed higher Tuesday with positive internals on the NYSE Composite and NASDAQ as trading volumes declined on both exchanges from the prior session. The end result was the same as has been seen over the past several sessions with the same three indexes making new closing highs leaving all the near-term trends unchanged with a mix of neutral and bullish slopes. The data remains a mix of neutral and cautionary signals with psychology waving yellow flags. As well, forward valuation for the SPX is back at peak levels and well above the “rule of 20” fair value metric while market breadth remains questionable. So, despite the index gains, we remain “neutral” in our near-term outlook for the overall equity markets.
On the charts, all the major equity indexes closed higher yesterday with positive internals on the NYSE and NASDAQ as trading volumes declined.
The data remains mixed.
In conclusion, our “neutral” outlook for the equity markets persists as the popular equity indexes continue to march north while valuation, advisor sentiment, market breadth and the VIX remain cautionary.
SPX: 3,398/NA DJI: 27,578/28,893 COMPQX: 11,250/NA
NDX: 11,277/NA DJT: 10,991/11,363 MID: 1,885/1,974
RTY: 1,550/1,595 VALUA: 6,198/6,568
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