Technical Talk: Still Riding the Range
August 18, 2010
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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.
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Technical Talk: August 18, 2010
Current Strategy:
The technical picture has improved a fair amount as we have seen a basing pattern start to take shape over the past week. Thus, as long as the recent low is not violated, we'll call the environment moderately positive. However, from an intermediate-term perspective, we still see the market being range bound.
We'd be Short-term Buyers At: A close above 1093 on S&P
We'd be Short-term Sellers At: A close below 1075
Trend and Momentum Indicators:
- TBC = Trend-and-Breadth-Confirm Model
- Current Support: 1080ish
- Current Resistance: 1100
Short-Term Trend: Although the trend feels a little fragile, we see the current action as being constructive. But, it does remain a news-driven environment.
Intermediate-Term Trend: The intermediate-term trend remains neutral.
Market Internals: Our shorter-term TBC models has upticked while the intermediate-term model remains negative.
Market Momentum: We have seen modest improvement in the momentum models, but there is significant room for improvement.
Support/Resistance Zones for S&P 500:
Early Warning Indicators:
Overbought/Oversold Condition: Stocks are no longer oversold from a short-term perspective, but nor are they overbought. Thus, the bulls will argue they have some room.
Investor Sentiment: Ditto from yesterday: Sentiment remains a potential plus for the bulls due to the extreme macro pessimism that has cropped up over the past week.
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