The end result of Tuesday's market action was all the near-term chart trends for the major equity indexes remain a mix of positive, negative and neutral projections while cumulative market breadth was unchanged as well.
Likewise, the data dashboard is still sending a generally neutral message except for the Insider Buy/Sell Ratio, which shows insiders increasing their selling activity of late. However, the trend of higher rates for the 10-Year Treasury as well as the high yield market continues to be a potential headwind, in our opinion.
On the Charts
The major equity indexes closed evenly split Tuesday with the S&P 500 (see above), DJIA, Nasdaq Composite and Nasdaq 100 posting declines as the rest saw gains.
Internals did improve on the day with positive breadth and up/down volumes and higher overall volumes on the NYSE and Nasdaq.
Yet, from a technical viewpoint, all the near-term trends were left intact with the Dow Jones Transports positive, the Nasdaq Composite and Nasdaq 100 negative and the rest neutral.
Cumulative market breadth was unchanged as well with the All Exchange and NYSE A/Ds neutral and the Nasdaq's negative. All remain below their 50-day moving average.
No stochastic signals were generated.
The data find the McClellan 1-Day Overbought/Oversold Oscillators remaining neutral (All Exchange: +8.98 NYSE: +19.89 Nasdaq: +0.27).
The detrended Rydex Ratio (contrarian indicator), measuring the action of the leveraged ETF traders, lifted slightly and remains neutral 0.24 as their bullish expectations have waned from their excesses at the market's highs.
Of note, the Open Insider Buy/Sell Ratio remains in bearish territory and dropped to 20.0% as insiders continue to increase their selling activity.
The Open Insider buy/sell ratio is 20.0 (bearish)
This week's contrarian AAII Bear/Bull Ratio (38.9/27.83) remains mildly bullish as the "crowd" has become cautious. The Investors Intelligence Bear/Bull Ratio (22.5/40.4) (contrary indicator) saw a drop in bulls but remains neutral.
Valuation and Yields
The forward 12-month consensus earnings estimate for the S&P 500 from Bloomberg has dipped slightly to $213.31 per share. As such, the S&P's forward P/E multiple is 20.4x with the "rule of 20" finding fair value at approximately 18.4x.
The S&P's forward earnings yield is 4.9%.
The 10-Year Treasury yield dipped to 1.58% after a recent run to 1.61%. We see resistance at 1.62% with support at 1.47%.
Tuesday's market left the charts and data intact, which continue to suggest we maintain our near-term "neutral/negative" macro-outlook for equities.