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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: November 29, 2010
Current Strategy:
It's "game on" between our two teams today as it relates to the battle for the 1178 support zone. The bulls have been able to hold the line for the most part so far this morning but it is becoming clear the bears are not going to go away without a fight. Bottom line: Watch the 1178 area as a meaningful break below will undoubtedly bring in additional selling.
We'd be Short-term Buyers At: A close above 1200 on S&P 500
We'd be Short-term Sellers At: A close below 1178
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend is now moderately negative. However, as long as the S&P stays above 1178 on a closing basis, the bulls should be given the benefit of any doubt.
Intermediate-Term Trend: The corrective phase has put a dent in our intermediate-term trend rating. Although the indices are clearly higher than they were in early September, if the bears get something going we could easily revisit lower prices.
Market Internals: Our TBC models are both neutral this morning and at risk of falling farther.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models remain neutral-to-moderately positive - but are clearly weakening.
Support/Resistance Zones for S&P 500:
- Current Support: 1180ish
- Current Resistance: 1200ish
Early Warning Indicators:
Overbought/Oversold Condition: Stocks are now oversold from a short-term perspective and neutral from an intermediate-term perspective.
Investor Sentiment: The sentiment indicators are beginning to pull back from the recent optimistic highs.
Chart Watch:
S&P 500 Last 12 Months
S&P 500 Last 5 Years
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