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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: January 31, 2012
Our Current Take:
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We would consider being short-term buyers at: A successful test of 1300 or a close above 1327 on S&P 500
We would consider being short-term sellers: A close below 1300 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: After seven days of sideways action, the short-term trend is now neutral. However a break below 1300 will give the ball back to the bears.
Intermediate-Term Trend: Although the bears may be able to get something going in the short-term, the intermediate-term trend remains positive at this stage. We would need to see a break back below 1270 in order to downgrade the trend.
Market Internals: Our short-term TBC models are mixed this morning as the s.t. model is neutral and the i.t. model is positive.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models are also more mixed today as the recent sideways action has caused the indicators to weaken.
Support/Resistance Zones for S&P 500:
- Current Support: 1300
- Current Resistance: 1350ish
Early Warning Indicators:
Overbought/Oversold Condition: The short-term overbought condition is being quickly worked off with the weakness seen over that past two mornings. S.T. is neutral, I.T. is still moderately overbought.
Investor Sentiment: Nothing new to report... Our shorter-term sentiment indicators remain at negative levels. This clearly favors the bears here.
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: 5 day weighted ma moved forward two days (blue dash), 10 day weighted ma offset by 2 days (orange), 18 day weithged ma (cyan), and stochastic %K using 14 and %D.
S&P 500:
NASDAQ Composite
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