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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 19, 2011
Our Current Take:
The near-term support at 1210 is once again being tested this morning as the market is being driven by the action in the Euro. The bottom line from a technical perspective is fairly straightforward here... a break below 1209 would likely bring in additional technical selling while a move back above 1225 might coax the bulls to get back in the game.
We would consider being short-term buyers at: A close above 1230 on the S&P 500
We would consider being short-term sellers: A close below 1209 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: Describing the short-term trend as neutral is definitely generous as the current support is hanging by a thread.
Intermediate-Term Trend: The intermediate-term trend continues to be largely neutral. As one of my colleagues put it this morning, "stocks can't go up because of Europe and can't go down because of the good U.S. data."
Market Internals: Our TBC models are mixed this morning as the s.t. model is neutral while the i.t. model is negative.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: We continue to watch our momentum models as they have been a great "tell" lately. And this morning they are moderately negative.
Support/Resistance Zones for S&P 500:
- Current Support: 1210
- Current Resistance: 1220-40
Early Warning Indicators:
Overbought/Oversold Condition: In light of the fact that the bulls have been unable to get anything going, the market is back to a modestly oversold condition for a short-term perspective and still neutral from an intermediate-term view.
Investor Sentiment: No change today as our sentiment models continue be stuck in the neutral zone.
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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