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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: June 28, 2010
Current Strategy:
With everyone having become a "negative Nancy" lately, it is little surprise that stocks are trying to work their way higher this morning. It probably doesn't hurt much that Wednesday marks then of a pretty rotten quarter - so a little lipstick here at the end might serve to dress up this pig a bit. With the market having found some support over the past three days, it now appears that the bulls are taking another shot at a rally here near the bottom of the range. So, if you are a short-term trader, it's time to mount up and ride the range.
We'd be Short-term Buyers At: Close above 1090 on S&P 500
We'd be Short-term Sellers At: Close below 1050
Trend and Momentum Indicators:
Short-Term Trend: With the S&P having tested the 1070 zone for a third straight session this morning, it is little surprise that the bulls are feeling emboldened. This might also present a decent spot to cover some shorts if you were in the bear camp as it looks like this thing might "go the other way" for a spell.
Intermediate-Term Trend: The intermediate-term trend remains moderately negative. However, the nearby support is proving helpful to the bull camp. But make no mistake about it; unless the bulls can push above 1125, any upside push should be viewed as a trading opportunity only.
Market Internals: Both of our TBC models remain negative, but the short-term model could improve this afternoon if the bulls can keep the ball moving up the field.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models are mostly negative, but not as negative as one might expect. Thus, the bulls have a chance here.
Support/Resistance Zones for S&P 500:
- Current Support: 1067
- Current Resistance: 1090
Early Warning Indicators:
Overbought/Oversold Condition: Stocks are now oversold from both a short- and intermediate-term perspective.
Investor Sentiment: No change: Sentiment remains overly negative, which will become a positive at some point.
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 simple ma (purple), 25 day weighted ma (cyan), 10 day exponential ma (thick orange), 200 day simple ma (thin orange), standard deviation bands using 1.9 std dev of 21 day and stochastic %K using 14 and %D.
S&P 500:
NASDAQ Composite
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