Sign Up to Receive an Email Alert when Technical Talk is Updated
Although we disagree with the idea that "the tape tells all," it is important for all traders to stay on top of key technical happenings on the charts. Below is our current "executive summary" take on the State of the Tape.
Technical Talk: March 1, 2011
Current Strategy:
I am a big believer in the concept of first understanding the market environment you are in and then applying the proper tools to the environment. So, our first job today is to identify the environment. Is it an uptrend, a downtrend, or a consolidation? Actually, I'm going to say it's none of the above and that we're currently facing a news-driven market. As such, it is best to avoid getting whipped around by the news and to attempt to "listen" to the overall message the market is offering. And what I'm "hearing" at the moment is that surging oil and tanks running around the desert could become a problem. But since the situation and the news is very fluid, we'd probably sit tight while the indices figure out which end of the current range is more appropriate.
We would consider being short-term buyers at: A successful retest of 1300 or a close above 1327 on the S&P 500
We would consider being short-term sellers at: A close below 1300
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend is now neutral and at risk of breaking down. But, the day is young.
Intermediate-Term Trend: Nothing really new to report here. As we've been saying, the uptrend that began in September remains intact.
Market Internals: Our TBC models both remain positive today. However, should the morning weakness continue, our short-term model is likely to be downgraded.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models continue to offer mixed messages. One is positive, one is neutral, and one is low neutral. This tells us that the bulls are not hitting on all cylinders at the moment.
Support/Resistance Zones for S&P 500:
- Current Support: 1300ish
- Current Resistance: 1325 - 1340
Early Warning Indicators:
Overbought/Oversold Condition: From a short-term perspective, the market remains neutral today. But from an intermediate-term outlook, the market is still modestly overbought.
Investor Sentiment: Our sentiment indicators don't whip around much and a couple of them are only updated weekly. But with that said, this category remains moderately negative as sentiment readings are still too high.
Chart Watch:
Below are snapshots of the two main charts we watch closely each day from a technical perspective. The indicators we display on the charts below include: 50 day weighted ma (purple), 18 day weithged ma (cyan), 10 day weighted ma offset by 2 days (orange), 4 day weighted ma offset 2 periods (dashed blue) and stochastic %K using 14 and %D.
S&P 500:
NASDAQ Composite
The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
