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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: October 7, 2010
Current Strategy:
And so we wait... For the jobs report, that is. While there are some factors at work in the market today, with an overbought condition and a big number on the horizon, this might be a good day to catch up on your research. Bottom line: The action remains constructive and we'd buy the dips.
We'd be Short-term Buyers At: A Pullback to test 1150 on S&P
We'd be Short-term Sellers At: A close below 1149
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend remains moderately positive, but the current stall will soon weigh on the trend if it continues.
Intermediate-Term Trend: Sometimes things are fairly straightforward. The Intermediate-term trend remains positive.
Market Internals: Our TBC models remain positive this morning. But, our hair-trigger, short-term model could tick downward if the bears come away with a "W" today.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Nothing really new to report here. The momentum models remain on buy signals and the readings are decent.
Support/Resistance Zones for S&P 500:
- Current Support: 1150ish
- Current Resistance: 1175-1185
Early Warning Indicators:
Overbought/Oversold Condition: Stocks remain overbought from short-term perspective. And while our intermediate-term models are still technically neutral, the indicator is quickly approaching overbought territory.
Investor Sentiment: No change today as the sentiment indicators remains mixed. Thus, this area favors neither team at the moment.
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), and stochastic %K using 14 and %D.
S&P 500:
NASDAQ Composite
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