Sign Up to Receive an Email Alert when Technical Talk is Updated
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 28, 2010
Current Strategy:
Given that there has been a fair amount of up-down, down-up movement of late - but no progress in either direction - it appears that a consolidation phase has begun. Thus, we will need to watch the support levels closely as a violation will undoubtedly embolden the bears.
We'd be Short-term Buyers At: A close above 1186 on S&P
We'd be Short-term Sellers At: A close below 1170
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend remains neutral this morning. However, given that the ma's are all moving higher and the even the 5-day remains above the 10-day, there is no reason to bail on the trend just yet.
Intermediate-Term Trend: No change today. We have had a strong run and therefore the bulls get the benefit of doubt here. As we said yesterday, the intermediate-term uptrend will remain moderately positive as long as the S&P holds above 1160 and the 10-day ma stays above the 25-day.
Market Internals: Our short-term TBC models did indeed downtick to neutral. This is the first sign of a crack in the foundation of the move. We will be watching these indicators closely for signs of a breakdown.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: The momentum indicators are in decent shape still. But the strengh of the trend is fading fast.
Support/Resistance Zones for S&P 500:
- Current Support: 1170ish
- Current Resistance: 1185
Early Warning Indicators:
Overbought/Oversold Condition: The s.t. overbought condition is currently being worked off. However, stocks have been unable to become oversold during the recent run and the intermediate-term indicators remain very overbought. As such, this remains both a sign of strength and a warning sign.
Investor Sentiment: Sentiment remains optimistic and is a concern.
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
The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
