Guy S. Ortmann, CMT | May 17, 2022 09:17AM ET
The major equity indexes closed mostly lower Monday with only the DJI posting a gain. However, internals were positive on the NYSE, although those of the NASDAQ were negative as both indexes saw lower volumes from the preceding session with most closing near the midpoints of the intraday ranges.
No alterations of near-term trends were seen, leaving them a mix of neutral and negative. Yet, some encouragement is coming from the stochastic readings as all saw bullish stochastic crossovers generated.
Meanwhile, the data continues to suggest a continuation of market strength that, in our opinion, may well result in tests of the various index resistance levels. Also. market valuation has seen some significant tempering that suggests it is possible the markets have seen their lows assuming chart support levels hold.
On the charts, all but the DJT closed lower yesterday. However, the session had no impact on the chart near-term trends, leaving the SPX, DJI, and DJT neutral and the rest negative.
There was no shift in the cumulative breadth levels that find the All Exchange and NYSE neutral while the NASDAQ's remains negative. The stochastic readings, however, are sending some encouragement as their oversold conditions reversed to bullish stochastic crossover signals across the board.
As noted recently, our view of the data continues to suggest further market strength that we suspect may lead to tests of the resistance levels of each of the indexes.
With investor sentiment at levels that have historically preceded market rallies and the rest of the data encouraging as valuation has seen a notable moderation, we believe the market is likely to see more strength.
SPX: 3,894/4,152 DJI: 31,074/32,995 COMPQX: 11,167/12,259 NDX: 11,886/13,044
DJT: 14,290/14,906 MID: 2,299/2,513 RTY: 1,710/1,855 VALUA: 8,122/8,882
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