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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 18, 2010
The Trend and Momentum Indicators:
Short-Term Trend: We continue to be on the lookout for a pullback, but so far the trend remains positive.
Intermediate-Term Trend: If you are not in the habit of looking at weekly charts, we'd recommend you take a peek at a weekly chart of the S&P. It would appear that the index has embarked on a new leg higher. While we still expect a pullback, this is bullish action.
Market Internals: No change: Our TBC models* are both positive and project strong returns.
- *TBC = Trend-and-Breadth-Confirm Models
Market Momentum: Same song, different day: All three momentum models remain positive today.
Support/Resistance Zones for S&P 500:
- Current Support: 1150ish
- Current Resistance: 1200
The Early Warning Indicators:
Overbought/Oversold Condition: Nothing new to report on this topic. Stocks are overbought from a short-term perspective and are starting to work towards an overbought condition (although not there yet) from the intermediate-term view.
Investor Sentiment: Our sentiment indicators have finally flipped to negative on balance. While the bulls will argue that this situation can stay in place for some time yet (it can), there is no denying that sentiment is now approaching "frothy."
Current Strategy:
We will admit that we can't shake the feeling that a pullback, or at the very least, a period of consolidation, is lurking. But as we've been saying, the trend is still your friend at the present time. On the other side of the aisle, the bears can point to this morning's survey on CNBC asking viewers is the Dow will hit 11,000 before the end of the quarter as evidence that things may be getting more than a little one-sided at the moment. Bottom Line: We would put current buying needs on hold until a pullback/consolidation materializes.
We'd be Short-term Buyers At: A successful retest of 1140 - 1150 on S&P 500
We'd be Short-term Sellers At: Close below 1134 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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