Technical Talk: A Pause the Refreshes
August 5, 2009
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: August 5, 2009
The Trend and Momentum Indicators:
Short-Term Trend: Although the momentum seems to be waning at the present time, everyone recognizes that stocks cannot continue to advance at the pace they have been - so this "pause" in the action is normal.
Intermediate-Term Trend: For intermediate-term investors, the appropriate phrase right now would be, "It's all good."
Market Internals: As has been the case for some time now, both our short-term and intermediate-term trend-and-breadth-confirm models remain positive today.
Market Momentum: Our momentum indicators continue to remain positive on balance.
The Early Warning Indicators:
Overbought/Oversold Condition: Stocks remain maximum overbought on a short-term basis and have now become modestly overbought on an intermediate-term basis.
Investor Sentiment: Our daily sentiment indicator has popped to its highest level on record since the beginning of 2002 and the "market timers" at Rydex hav the most money in "long" funds since early 2008. This is clearly a negative as time goes by.
Current Strategy:
Although the S&P and NASDAQ have indeed been able to hold above their all important lines in the sand (so far), they have not sprinted away from those big round numbers as of yet. This could be a set up for a downside test, which we would view as a buying opportunity for now.
We're Short-term Buyers At: A pullback to 975 on S&P
We'd be Short-term Sellers at (or near): A close below 974 on S&P
S&P 500: 
NASDAQ Composite 
The indicators we have displayed on the chart above include: 100 day exponential moving average (blue), 50 day simple ma (purple), 25 day simple ma (cyan), 10 day simple ma (orange), standard deviation bands using 1.9 std dev of 21 day and stochastic %K using 14 and %D.
S&P 500 Intraday
S&P 500 Last 3 months
S&P 500 Last 6 months
S&P 500 Last 12 months
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