Guy S. Ortmann, CMT | May 01, 2019 10:38AM ET
The indexes closed mixed Tuesday with positive internals on the NYSE while those on the NASDAQ were negative. Volumes rose on both exchanges from the prior session. The SPX did manage to make another new closing high but the short term trends are unchanged with a mix of neutral and positive. Throughout the recent rally, the data has stayed fairly benign and remains so with the exceptions of investment advisors creeping into overly bullish sentiment while the spread between the SPX forward 12 month p/e and fair value continues to contract. Nonetheless, at this stage we do not see enough of a shift in the weight of the evidence to formally alter our near term “neutral/positive for the major equity indexes with the caveat that some individual names with elevated PEGs being vulnerable.
On the charts, the SPX (page 2), DJI (page 3) and DJT (page 4) closed higher yesterday as the rest declined.
The data remains largely neutral including all of the 1 day McClellan OB/OS Oscillators (All Exchange:-2.39 NYSE:-4.11 NASDAQ:-0.71).
In conclusion, we are maintaining our near term market outlook at “neutral/positive”. However, with the SPX essentially at fair value, investment advisors a bit too bullish and some market leading stocks at lofty valuations ranging for 2 to 4 times their projected 5 year growth rates taking it on the chin should they not excite investors with earnings reports, progress may become more muted.
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