All the major equity indices closed higher Tuesday on higher trading volume. The NYSE saw positive breadth and up/down volume while the Nasdaq had slightly negative breadth but positive up/down volume.
The two technical events on the charts worth noting were the S&P 500 (see below) making a new closing high, although by a small measure, as the Dow Jones Transports finally closed above its downtrend line that had been in place since the beginning of June. As such, its near-term trend turned neutral from bearish.
So, regarding trends, the S&P, Nasdaq Composite and MidCap 400 are positive with the rest neutral.
No change was seen in cumulative breadth with the All Exchange and Nasdaq A/Ds neutral and the NYSE's positive.
No stochastic signals were generated.
The data still finds all the McClellan 1-Day Overbought/Oversold oscillators in neutral territory (All Exchange: +1.78 NYSE: +9.82 Nasdaq: -5.21).
The Rydex Ratio (contrarian indicator), measuring the action of the leveraged ETF traders, was unchanged at 1.33 and remains bearish.
Meanwhile, the Open Insider Buy/Sell Ratio dipped a bit further to 39.1 but remains in its neutral range as insiders again backed off their recent buying activity.
This week's contrarian AAII bear/bull ratio (27.17/34.32) and Investors Intelligence Bear/Bull Ratio at 16.5/52.6 (contrary indicator) saw little change, leaving the AAII neutral and the II bearish.
The forward 12-month consensus earnings estimate for the S&P 500 from Bloomberg lifted to $204.54 per share. As such, the S&P's forward P/E multiple is 21.6x with the "rule of 20" finding fair value at approximately 18.8x.
The S&P's forward earnings yield is 4.62%.
The 10-year Treasury yield closed at 1.18%. We view support to be 1.13% and resistance at 1.3%.
Tuesday's action left the charts and data at levels that suggest we maintain our current "neutral/positive" macro-outlook for equities.