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.
Short-Term Trend: S&P in confirmed downtrend. Currently attempting to "hold the line" at support.
Intermediate-Term Trend Model: Indicator is clearly negative. Our all-cap market index needs an advance of 7.5% to return to neutral while the A/D line is within 0.25% of returning to neutral (which would upgrade the indicator to neutral).
Market Momentum: Intermediate-Term trend is not yet completely negative on S&P 500. If support holds, we can upgrade rating. But if not, it will have to downgrade the indicator back to negative.
Overbought/Oversold Condition: One of our stochastic indicators has reached oversold and then reversed - moving it to positive. This has flipped this indicator to Neutral where the market has actually gained ground at a rate of 9.5% per year.
Investor Sentiment: Sentiment Indicators are all showing extreme pessimism, which, of course, is a positive.
The Bottom Line: (From our Daily Decision Model)
If - and this is a VERY big IF - support can hold over the next few days, then the bulls are due a bounce higher. We will want to watch the quality of any move up for an indication of it being
anything more than an oversold bounce. Conversely, if S&P breaks yesterday's low and stays down, the bears will have regained control of the game.
Dow Jones Industrial Average:
S&P 500 Intraday
S&P 500 Last 3 Months
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