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: February 8, 2010
The Trend and Momentum Indicators:
Short-Term Trend: Stocks are doing their best to build on Friday's reversal higher. This is a positive development from a near-term perspsective.
Intermediate-Term Trend: The market finds itself at a critical juncture. Although we don't feel Friday was a "key reversal" it may provide a base for a bounce.
Market Internals: Same song, different day: Both of our TBC (trend-and-breadth confirm) models are now in negative territory.
Market Momentum: Also no change on the momentum front. Our momentum models are mixed. The short-term model is negative and our intermediate-term models are now close to going negative - but still neutral so far.
Support/Resistance Zones for S&P 500:
- Current Support: 1060(ish)
- Current Resistance: 1080
The Early Warning Indicators:
Overbought/Oversold Condition: The bulls have a shot here and the oversold condition should help. But, if they don't capitalize on it, well…
Investor Sentiment: The sentiment indicators remain favorable. But again, these are "get ready to" type of indicators. They are not used to "timing" decisions.
Current Strategy:
The bulls are doing their level best to convince everyone that Friday's late pop was a reversal. However, we're of the mind that an oversold bounce is a more likely scenario. We will remain skeptical unless some momentum starts to build. The bulls must have some continuation here in order to stay in the game.
We'd be Short-term Buyers At: A close above 1075
We'd be Short-term Sellers At: Close below 1060 on S&P
S&P 500:
NASDAQ Composite
The indicators we have displayed on the chart above include: 50 day exponential ma (purple), 25 day exponential ma (cyan), 10 day weighted ma offset by 2 days (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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