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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: March 11, 2010
The Trend and Momentum Indicators:
Short-Term Trend: Although a pullback is likely to occur at any time, the trend remains your friend for now.
Intermediate-Term Trend: Although the bears may have fumbled their opportunity this morning, the overhead resistance on the S&P and Dow remains a problem in the near term.
Market Internals: With no weakness to speak of recently, our TBC models* both remain in the positive zone again today.
*TBC = Trend-And-Breadth-Confirm Models
Market Momentum: No change yet on the momentum front. While we'd like to see a little more volume, this has been an issue for most of the current bull market. And the bottom line is the indicators are positive on balance.
Support/Resistance Zones for S&P 500:
- Current Support: 1140
- Current Resistance: 1150
The Early Warning Indicators:
Overbought/Oversold Condition: Nothing new to report this morning. Stocks are very overbought from a short-term perspective but only neutral from an intermediate-term standpoint. Thus, the stars have not aligned for a meaningful decline at this point.
Investor Sentiment: As expected, the sentiment indicators are beginning to perk up. While this is not an outright negative at the present time, the indicators have now moved modestly into the red.
Current Strategy:
Unless the bears can get it together this afternoon, we will have to say that our furry friends fumbled the ball in the red zone this morning. Stocks are overbought and due for a pullback, so the fact that the bear camp couldn't do anything with the news of inflation brewing in China suggests that the bulls remain firmly in control. We would expect/prefer to see a pulback in the near-term and every day this does not happen adds fuel to the bull train.
We'd be Short-term Buyers At: A successful retest of 1125-30 on S&P 500 or a close above 1150
We'd be Short-term Sellers At: Close below 1120 on S&P 500
S&P 500:
NASDAQ Composite
The indicators we have displayed on the chart above include: 50 day exponential ma (purple), 25 day exponential ma (cyan), 10 day weighted ma offset by 2 days (orange), standard deviation bands using 1.9 std dev of 21 day and stochastic %K using 14 and %D.
S&P 500 Intraday
S&P 500 Last 3 months
S&P 500 Last 12 months
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