Technical Talk: Price Action Decent Despite Euro Yields Jitters
November 16, 2011
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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: November 16, 2011
Our Current Take:
Stocks are down this morning as yields in Europe continue to give investors the jitters. A set of better than expected economic reports here in the U.S. gave stocks a boost in the morning, though those gains have been pared in the early afternoon.
Technically speaking, we are in the same position as we have been for a few days now. We are at the intersection of numerous short term moving averages (5, 10, and 18dma), and are waiting for a breakout of this pennant formation to either side. The good news for the bulls is that even with all of this Euro zone uncertainty, the S&P 500 hasn't fallen below support at 1220, and is actually holding up quite well around 1250. This gives the sense that a lot of the uncertainty is already priced in. With economic data improving at home, we may see a push higher if yields can calm down overseas.
We would consider being short-term buyers at: A close above 1275
We would consider being short-term sellers: A close below 1220 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: Stocks have been sliding sideways for weeks. Thus, maintain our 'neutral' rating of the short-term trend.
Intermediate-Term Trend: We maintain the intermediate-term trend as 'positive' as there is a distinct uptrend since the October 3rd lows.
Market Internals: All three of our TBC models remain 'positive' this morning.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models are 'moderately positive' today.
Support/Resistance Zones for S&P 500:
- Current Support: 1220
- Current Resistance: 1275-1285
Early Warning Indicators:
Overbought/Oversold Condition: The overbought/oversold models are all neutral this morning. This is actually a positive at the present time.
Investor Sentiment: Our sentiment models continue to be a mixed bag today. We wouldn't worry too much about this indicator at the moment, as sometimes indicators don't have much to tell us.
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
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