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: July 20, 2011
Our Current Take:
The stock market appears to be in wait-and-see mode after reacting to the hopeful news on the debt ceiling debate yesterday. In addition, EU leaders are meeting in Berlin this week to continue to work on Greece's bailout. And given that there is likely still a fair amount of political wrangling to come on both sides of the Atlantic, some traders may be looking to take profits and avoid the headline risk today. However, the bottom line is the market remains rangebound at the present time.
We would consider being short-term buyers at: A successful retest of 1320 on the S&P 500
We would consider being short-term sellers at: A close below 1305 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: Although some backing and filling is to be expected after yesterday's move, the short-term trend is clearly more constructive at this point. However, this remains a news-driven environment.
Intermediate-Term Trend: Given that stocks have now been moving essentially sideways for the five months now, the intermediate-term trend has to be viewed as neutral.
Market Internals: Our TBC models flipped back to positive with yesterday's rally. In short, this is a positive as stocks have historically gained ground at a rate of more than 30% per year when both models are positive.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: The momentum indicators have perked up a bit this morning, but there is still a fair amount of room for improvement.
Support/Resistance Zones for S&P 500:
- Current Support: 1320ish
- Current Resistance: 1340
Early Warning Indicators:
Overbought/Oversold Condition: The oversold condition that was briefly apparent this week is quickly vanishing. This helps confirm our view that this remains a largely neutral environment.
Investor Sentiment: Our sentiment indicators are a mixed bag at the present time, which also points to yep, you guessed it; a neutral setting.
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.
