New closing highs.
However, the data is casting a few shadows, including some of the McClellan 1-Day OB/OS Oscillators being in overbought territory.
Let's break it all down.
On the Charts
All the major equity indices closed higher Friday with positive internals as the S&P 500 and Value Line Arithmetic Index posted new closing highs. Most closed at or near their intraday highs.
We would once again draw attention to the unweighted and broad Value Line index (see below), which implies a stronger underlying market structure than what some of the more "popular" averages may project.
Regarding trends, The DJIA and MidCap 400 are neutral with the Dow Jones Transports still in a short-term downtrend. The rest are positive.
Market breadth remains positive as well with the cumulative advance/decline lines for the All Exchange, NYSE and Nasdaq in uptrends and above their 50-day moving averages.
No stochastic signals were generated during Friday's session.
The McClellan 1-Day Overbought/Oversold Oscillators now find the All Exchange and Nasdaq overbought with the NYSE neutral (All Exchange: +52.67 NYSE: +40.78 Nasdaq: +62.61).
The Rydex Ratio (contrarian indicator) measuring the action of the leveraged ETF traders rose to 1.5 and remains in bearish territory as the ETF traders extended their leveraged long exposure.
Last week's contrarian AAII bear/bull ratio (24.18/39.18) stayed neutral but saw a lift in bullish sentiment as did the Investors Intelligence Bear/Bull Ratio (contrary indicator) at 16.25/53.6, which remains on a bearish signal.
The Open Insider Buy/Sell Ratio dropped further into bearish territory Friday at 18.1.
Insider buying interest remains absent.
Valuation continues to appear extended, with the forward 12-month consensus earnings estimate for the S&P 500 from Bloomberg lifting to $191.77 per share. The S&P's forward P/E multiple is 22.1x, with the "rule of 20" finding fair value at 18.5x. The valuation spread has been consistently wide over the past several months while the forward estimates have risen rather consistently.
The S&P's forward earnings yield remains at 4.52%.
The 10-year Treasury yield closed at 1.46%. We view support at 1.4% with resistance at 1.55%. We continue to believe the moves in the 10-year yield may well have the greatest influence over the near-term action on the equity indices.
We remain near-term "neutral/positive" in our macro-outlook for equities as no new evidence has been presented to suggest otherwise. However, some of the data is starting to cast some clouds.