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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: December 13, 2011
Our Current Take:
It's all program trading all the time right now as once again the boyz and their toys have created another big intraday swing on word that Germany refuses to add to the EFSF/ESM limits. While the volatility continues to rattle even seasoned traders I talk to and the action is getting very sloppy, the bottom line from a chart standpoint is that the near-term support continues to hold up. So, unless, the 1230 area is breached, we will continue to assume that this is a consolidation phase.
We would consider being short-term buyers at: A close above 1260 on the S&P 500
We would consider being short-term sellers: A close below 1230 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend is now neutral and hanging on by a thread.
Intermediate-Term Trend: Nothing new here today... Our rating of the intermediate-term trend continues to be somewhere between moderately positive and neutral.
Market Internals: Our TBC models are now both neutral. This seems to be a pretty decent summary of the technical picture.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models have weakened a bit further this morning and are now only modestly positive.
Support/Resistance Zones for S&P 500:
- Current Support: 1200
- Current Resistance: 1260-80
Early Warning Indicators:
Overbought/Oversold Condition: Stocks remain overbought from a short-term perspective and neutral from the intermediate-term view. Thus, since these two indicators are not "lined up" they aren't much help to either team.
Investor Sentiment: Frustration may be the key feeling in the market right now (especially for the bull camp). However, our sentiment models are completely flat at the present time.
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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