Short-Term Trends Unchanged
Guy S. Ortmann, CMT | Aug 09, 2018 10:28AM ET
The bulk of the indexes closed lower Wednesday with the exceptions of the COMPQX and NDX posting gains. Internals were negative on the NYSE and mixed on the NASDAQ that saw positive breadth but negative up/down volume. Overall trading volumes declined on both exchanges from the prior session. No technical events of import were generated on the charts while the data remains generally neutral in its signals. As such, we are maintaining our near term “positive” outlook for the major equity indexes at this point in time.
- On the charts, the COMPQX (page 3) and NDX (page 3) closed higher yesterday as the rest of the indexes closed in the red. Internals were mixed as described above. No technical events worthy of comment were generated, leaving all of the charts in short term uptrends with the one exception of the RTY (page 5) remaining neutral. The cumulative advance decline lines for the All Exchange, NYSE and NASDAQ remain positive and above their 50 DMAs.
- The data continues to send its largely neutral message including all of the McClellan OB/OS Oscillators (All Exchange:-1.11/-4.81 NSYE:-3.99:+7.41 NASDAQ+3.61/-14.16). The Equity Put/Call Ratio (0.62), Open Insider Buy/Sell Ratio (378.4) and detrended Rydex Ratio (1.04) are neutral as well. The bullish Total P/C (0.95) is being counterbalanced by a bearish OEX P/C at 2.57. Valuation finds consensus forward 12-month earnings estimates for the SPX at $169.07, leaving the forward 12 month p/e for the SPX at 16.9 versus the “rule of 20” implied fair value of a 17.0 multiple. The “earrings yield” stands at 5.92%.
- In conclusion, given the current state of the charts and data, we are maintaining our near-term “positive” outlook for the major equity indexes.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- NASDAQ: 7,698/7,892
- NDX: 7,294/7,507
- DJT: 10,925/11,254
- MID: 1,966/NA
- Russell: 1,654/1,712
- VALUA: 6,394/NA
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