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: December 7, 2011
Our Current Take:
With two very big events on the schedule for tomorrow and Friday, it is little wonder that stocks are pulling back a bit today. And given the propensity for EU officials (named and unnamed) to talk endlessly to the press, traders may want to take a little something off the table after the recent run for the roses. At this stage however, we will call the action over the past few days "constructive" since the bulls have been able to hold their ground. However, a break below 1240 might change our mind.
We would consider being short-term buyers at: A close above 1260 or successful test of 1240
We would consider being short-term sellers: A close below 1240 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: Stocks now appear to be consolidating the recent gains. Thus, our view is the s.t. trend remains moderately positive.
Intermediate-Term Trend: While there has been a lot of volatility up and down, the intermediate-term trend hasn't really changed much in the six weeks. We'll call it modestly positive.
Market Internals: Our TBC models remain positive this morning.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: One of our three momentum models finally issued a buy signal yesterday (albeit by the smallest of margins). The other two models remain neutral. In short, we need to see improvement in these models if the bulls are to keep this thing moving higher.
Support/Resistance Zones for S&P 500:
- Current Support: 1240
- Current Resistance: 1260-80
Early Warning Indicators:
Overbought/Oversold Condition: Stocks remain overbought condition from a near-term perspective and are high neutral from an intermediate-term perspective.
Investor Sentiment: As we've been saying lately, the sentiment models remain conflicted. While this appears strange to us, the market's violent mood swings are likely to blame here as moves don't last long enough for the indicators to move up or down.
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 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 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.
