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 for: February 26, 2009
Short-Term Trend: With the indices having tested the recent low for a second time yesterday, we can, at this stage at least, deem the test successful. For this reason, we are upgrading the rating to neutral and we will be watching for a test of overhead resistance.
Market Internals: While yesteray's session "felt good," both the trend and breadth indicators remain negative. The all-cap market index now needs to advance 10.3% to return to neutral but the A/D line is within 0.10% of returning to neutral, which would upgrade the indicator. As we've noted recently, the A/D line has hung tough during the decline and has not broken down, which is a positive.
Intermediate-Term Trend: The Intermediate-Term trend shows slight signs of improvement as the potential for a higher low is still on the table.
Overbought/Oversold Condition: TThe market remains modestly oversold but the oscillators are moving up off of their lows.
Investor Sentiment: No change in Sentiment. Indicators remains negative and near the lows, which is a positive.
Current Strategy:
We continue to believe that the market is setting up nicely for a meaningful rally and we will be watching the short-term trend closely for confirmation. Overhead resistance will be the key to the next move (either a break above or another trip down to test the lows). At this point, our plan is to be buyers of the dips or a break above the 10 dma.
S&P 500:
S&P 500 Intraday
S&P 500 Last 3 Months
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