Nasdaq Charts May Be Deceiving

 | Aug 01, 2018 | 10:27 AM EDT
  • Comment
  • Print Print
  • Print

Despite Tuesday's positive trading session, certain index charts remain negative. But are they really?

Let's take a closer look at the latest charts and data from the major equity indices and determine how it affects or near-term outlook for the market.


All of the indices closed higher Tuesday with increased volume and positive internals. A couple of positive technical events occurred in the form of the Dow Jones Transports closing above its near-term resistance level while the Nasdaq Composite (see below) and S&P MidCap 400 regained their 50-day moving averages that were violated at the close of the previous session.

Source: Worden

We would also note the stochastic levels for the Nasdaq Composite, Nasdaq 100 (see below) and MidCap 400 are now oversold but have not yet triggered bullish crossover signals. As such, the short-term trends cover all of the bases, with the Dow Jones Industrial Average and Transports positive, the S&P 500, Russell 2000 and Value Line Arithmetic Index neutral, while the Nasdaq Composite, Nasdaq 100 and MidCap 400 remain in short-term downtrends.

Source: Worden

The cumulative advance decline lines for the All Exchange and NYSE are neutral with the Nasdaq's negative and below its 50 DMA.


The data continues its largely neutral message, including all of the McClellan Overbought/Oversold Oscillators (All Exchange:-24.75/+25.67 NYSE:-10.0/+46.61 NASDAQ:-40.24/+8.77).

The Equity Put/Call Ratio (0.69) and OpenInsider Buy/Sell Ratio (44.6) are neutral while the Total P/C (contrary indicator) is a bullish 1.0 as is the OEX P/C at 0.92.


The S&P 500 is trading at a P/E multiple of 16.7x forward 12-month earnings estimates of $168.48 per share, versus the "rule of 20" implied fair value multiple of 17.0x, with a 5.98% earnings yield.

Our Outlook

While some of the index charts remain negative, we suspect some of the prior market leaders with significant market capitalizations may be exerting enough influence to make things look a bit more negative than may actually may be the case. And though some shift in leadership may be at hand, we are maintaining our near term "neutral/positive" outlook for the indices based on the state of the charts and data.

Columnist Conversations 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...



News Breaks

Powered by


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.