Which Way Does It Go? Analyzing the Stock Market's Evenly Split Trends

 | Jul 20, 2018 | 10:30 AM EDT
  • Comment
  • Print Print
  • Print

Even Steven. 4-4. That's what's facing us in terms after Thursday's trading action.

While no significant technical events occurred on the charts, two indices are challenging resistance, leaving the near-term trends for the major equity indices evenly split.

Let's break it all down for you and come to a decision on our overall outlook.

Charts

The indices closed mixed Thursday with mixed internals on the NYSE and NASDAQ. Both exchanges saw positive breadth but negative up/down volume. The S&P 500, Dow Jones Industrial Average, Nasdaq Composite and Nasdaq 100 closed lower on the day as the rest advanced.

Source: Worden

The Dow Jones Transports (see above) closed back above its 50-day moving average while the S&P MidCap 400 (see below) and Value Line Arithmetic Index (page 5) closed near resistance but have yet to violate to the upside. As such, the near-term trends remain evenly split, with the S&P, DJIA, Nasdaq Composite and Nasdaq 100 in uptrends with the rest neutral.

The cumulative advance/decline lines for the All Exchange and NYSE turned slightly positive while the of the NASDAQ's remains neutral.

Source: Worden

Data

The data remains largely neutral. All of the McClellan Overbought/Oversold Oscillators are neutral (All Exchange:+21.33/+1.06 NYSE:+39.62/+2.68 NASDAQ:+5.55/-0.82) as are the Equity Put/Call Ratio (0.62) and OpenInsider Buy/Sell Ratio (39.8).

The Total P/C (contrary indicator) and OEX P/C are counterbalancing at 0.9 and 2.11 as the crowd is leaning toward puts while pros are once again betting on near term weakness reappearing.

Valuation

The S&P 500 is trading at a P/E multiple of 16.7x consensus forward 12-month earnings estimates for the S&P 500 of $167.59 per share versus the "rule of 20" implied fair value of a 17.1x multiple, and with a 6.0% earnings yield.

Bottom Line

Given the current state of the charts and data, we see no evidence presented to alter our near-term "neutral/positive" outlook for the major equity indices at this time.

Columnist Conversations

Barrons.com noted significant insider purchases in the beat-up shares of Newell (NWL). The stock is...
CEO Christian Brickman couldn't resist owning more Sally Beauty Holdings (SBH) when it briefly went below $14 ...
Move over Boca Biff - there is a new sheriff in town...Chance Walker! My conversation with Chance - high abov...
Oil tested its 200-day moving average this week, but the June 18 low of $63.59 a barrel held. As a result, we...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by

COLUMNIST TWEETS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.