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: September 13, 2011
Our Current Take:
Stocks continue the basing process as the market tries to figure out whether it is comfortable with the headlines coming out of Europe. Yesterday it was announced that the Chinese were going to be purchasing Itialian bonds, which helped stocks rally into the close. Today we're told that the Chinese won't be buying Italian bonds, rather Italian industrial goods. This news, along with the current fears over Greek default and French banks, could have meant more downward actions for stocks, but another headline that Merkel, Papandreou, and Sarkozy will hold a conference call on Wednesday helped prop stocks up.
The bottom line is that while there have been some technical positives today, such as leadership in semis and some resiliency from the bulls early on, it looks like our market is reacting to headlines out of Europe. The past few sessions have been very choppy, and that action could continue this week as we continue the 'bottoming process'.
We would consider being short-term buyers at: A close over 1200 and 1230 on the S&P 500
We would consider being short-term sellers at: A close below 1140 and 1120 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: Indices have dipped below their short term moving averages, despite Monday's late-afternoon rally. Thus, the short term trend remains moderately negative.
Intermediate-Term Trend: Since the end of the waterfall decline in early August, stocks have been shuffling sideways for weeks. Thus, we reaffirm our i.t. trend rating as moderately negative.
Market Internals: Our TBC models fell into moderately negative territory over the weekend, and remain as such this morning. Until the bulls can push these models back into positive territory for more than a few hours, we will continue to advise caution.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models are neutral once again. This shows us that while volatility still exists, there is a lack of meaningful thrust in either direction.
Support/Resistance Zones for S&P 500:
- Current Support: 1140
- Current Resistance: 1175-1200
Early Warning Indicators:
Overbought/Oversold Condition: Stocks are nearing an oversold condition once again after last week's selloffs on Thursday and Friday. We are now oversold in the intermediate-term, and nearly oversold in the short-term, thus the bulls may have an opportunity approaching to make a push.
Investor Sentiment: Our sentiment indicators are moderately positive this morning, which favors the bulls.
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: 150 day weighted ma (light orange), 50 day weighted ma (purple), 18 day weithged ma (cyan), 10 day weighted ma offset by 2 days (orange), 5 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 StateoftheMarkets 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 StateoftheMarkets 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.
