What the Charts and Data Tell Us After the Nasdaq's Record Day

 | Jul 13, 2018 | 9:33 AM EDT
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Two indices made new closing highs Thursday while the uptrends on the bulk of the indices remain intact. So, has our view of the markets changed?

Let's take a deep dive in to the charts and data in order to answer that question.

Charts

All of the indices closed higher Thursday with positive internals as volumes declined on the NYSE but rose on the NASDAQ from the prior session. The Nasdaq Composite (see below) and Nasdaq 100 closed above resistance to new closing highs. The rest remain in their short-term uptrends with the exception of the Dow Transports continuing neutral.

Source: Worden

While the stochastic readings continue to reside in overbought territory, none at this stage have generated bearish crossover signals that would suggest some degree of caution rising. The cumulative advance/decline lines for the NYSE, NASDAQ and All Exchange remain neutral and above their 50-day moving averages.

Data

The data is largely neutral with one exception.

All of the McClellan Overbought/Oversold Oscillators are neutral (All Exchange:+14.49/+11.5 NYSE:+28.95/18.22 NASDAQ:+3.33/+5.16) and a reasonable distance away from overbought zones. The Equity Put/Call Ratio (0.56) and OpenInsider Buy/Sell Ratio are neutral as well, while the Total Put/Call Ratio (contrary indicator) at 0.92 is bullish.

The one bearish signal appearing is coming from the OEX Put/Call Ratio (2.28), which finds the pros continue to have large put positions in place as they have been all week.

Valuation

The S&P 500 is trading at P/E multiple of 16.7x forward 12-month earnings estimates of $167.61 per share, versus the "rule of 20" implied fair value of 17.2x, and has a 5.99% earnings yield.

Bottom Line

At this point in time we do not see anything coming from the charts or data to cause an altering of our current near-term "neutral/positive" outlook for the major equity indices.

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