Tuesday, May 30, 2023

All But One Index Advance


Data Remains Mostly Neutral

All but one of the major equity indexes posted gains yesterday, the exception being the . All closed at or near their intraday highs with positive internals on both the and . More new closing highs were achieved while cumulative market remained unchanged and neutral. The near-term chart trends continue to be mixed while the data is still sending a generally neutral message except for some of the psychology data suggesting a potential excess of bullish expectations. The net result was nothing appeared on the charts or data to warrant a change in our current “neutral/positive” macro-outlook for equities at this time.

The data finds all the McClellan 1-Day OB/OS still in neutral territory (All Exchange: -18.28 NYSE: -11.11 NASDAQ: -22.88).

  • The Rydex Ratio (contrarian indicator page 8) measuring the action of the leveraged ETF traders was unchanged and remains bearish at 1.29.
  • This week’s contrarian AAII bear/bull ratio (23.33/43.07) moved back into mildly bearish territory while the Investors Intelligence Bear/Bull Ratio (contrary indicator page 9) saw a decline in bears and a lift in bulls, remaining bearish at 15.5/60.8. It suggests an excess of bullish expectations, in our opinion.
  • The Open Insider Buy/Sell Ratio saw an uptick to 28.6 and remains neutral.
  • Valuation finds the forward 12-month consensus earnings estimate from Bloomberg at $199.07 for the SPX. As a result, the SPX forward multiple is 22.0 with the “rule of 20” finding fair value at approximately18.6. The SPX forward earnings yield is 4.54%.
  • The closed flat at 1.36. We view support as 1.2% and resistance at 1.44%. The 10-Year Yield remains in a downtrend from its March peak that we view as a positive for equities regarding the valuation gap.

In conclusion, the mix of trends on the charts combined with the OB/OS levels, market breadth, valuation and other data suggest we maintain our “neutral/positive” near-term macro-outlook for equities. However, investor psychology still suggests a potential overly optimistic view on their part.

SPX: 4,295/NA

DJI: 34,570/NA

COMPQX: 14,356/NA

NDX: 14,485/NA

DJT: 14,247/14,905

MID: 2,668/2,716

RTY: 2,180/2,225

VALUA: 9,461/9,672

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Please enter your comment!
Please enter your name here



Related Stories