Rally Continues, But NASDAQ 100 Has Retracement On Its Mind

COMPQX And NASDAQ 100 Attain “Return Strains”

The most important fairness indexes closed greater Friday with optimistic internals on the and as NYSE volumes dipped and NADSDAQ volumes rose from the prior session. All however one of many indexes made new closing highs as all stay in near-term uptrends. Nevertheless, as famous beneath, each the COMPQX and NDX have reached their “return strains” which have presaged some digestion of beneficial properties 4 instances because the March lows of this yr.

In our opinion, they recommend some tempering of enthusiasm could also be acceptable for the near-term. The information is combined however typically impartial in nature. Given present circumstances, we’re sustaining our near-term “impartial” macro-outlook for equities.

On the charts, the foremost fairness indexes closed greater Friday with optimistic internals on each the NYSE and NASDAQ.

• Solely the DJT was unable to submit a brand new closing excessive.
• All of the indexes stay in near-term uptrends.
• Nevertheless, a better have a look at the COMPQX and NDX reveals each having reached their “return strains” that, since March, have been adopted by intervals of digestion of beneficial properties as famous on the NDX chart. In our opinion, the truth that stated return strains have been constant pullback ranges over the previous a number of months suggests some higher shopping for alternatives might lie forward as exams of uptrend strains could also be forthcoming.
• Cumulative market breadth stays optimistic on the All Trade, NYSE and NASDAQ.
• No stochastic alerts have been generated as of the shut on Friday.

The information finds the McClellan 1-Day OB/OS solely the NASDAQ nonetheless in overbought territory because the others stay impartial (All Trade: +49.82 NYSE: +49.11 NASDAQ: +52.09).

• The detrended Rydex Ratio (contrarian indicator) measuring the motion of the leveraged ETF merchants dipped to 1.16 however stays in bearish territory as they proceed their leveraged lengthy publicity.
• The Open Insider Purchase/Promote Ratio dipped to 35.7 as insiders did a little bit of promoting however stays impartial.
• Final week’s contrarian AAII Bear/Bull Ratio (29.67/41.53) remained impartial with the rise in bulls as did the Traders Intelligence Bear/Bull Ratio (23.8/48.9) (opposite indicator).
• Valuation finds the ahead 12-month consensus earnings estimate from Bloomberg dipping to $214.25 for the SPX. As such, the SPX ahead a number of is 21.9 with the “rule of 20” discovering honest worth at roughly 18.6.
• The SPX ahead earnings yield is 4.56%.
• The closed decrease at 1.45% and beneath assist. As such, we view resistance at 1.54% and assist at 1.39%.

In conclusion, we stay “impartial” in our near-term macro-outlook for equities because the COMPQXS and NDX charts recommend some retracement of current beneficial properties is changing into extra possible submit the current rally.

: 4,620/NA : 35,904/NA COMPQX: 15,641/NA : 15,975/NA

: 16,842/NA : 2,852/NA : 2,350/NA VALUA: 9,937/NA

All charts courtesy of Worden

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