Schaeffer's Trading Floor Blog

Slow and Steady

by 5/31/2005 3:26 PM
Stocks quoted in this article:

The bulls have kept up the buying pressure but have yet to push the SPX into positive territory...


Chart Courtesy of Thomson/ILX

My alert for NYSE net ticks hit again as the SPX grinds its way back toward the breakeven mark. Time is ticking away on today's session so it doesn't appear as if either the bulls or the bears are going to get much accomplished today...


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More Buying

by 5/31/2005 1:53 PM
Stocks quoted in this article:

It looks as if the bulls are giving it another try as my alert for NYSE net ticks just hit again...The last attempt failed to gain traction but this buying has already started to send the SPX off its session lows...


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Stocks quoted in this article:

One of the stocks I have been tracking in this space is bebe stores (BEBE). The shares are trading down two percent this afternoon after being downgraded today. However, they are still holding above the former resistance zone we recently discussed...


Created with SuperCharts by Omega Research

Meanwhile, the sentiment profile continues to shows skepticism...

  • Percent of analysts tracked by Zacks who rate the stock with a "buy": 38%
  • Number of analysts tracked by Zacks: 8
  • Short interest as a percent of float: 34.9%
  • Short interest ratio: 5.902

I would now expect this former resistance zone to serve as support...


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Index Check

by 5/31/2005 12:51 PM
Stocks quoted in this article:

For the most part, the action remains quiet as we cruise through lunch...

While there is a distinct negative skew, the moves are relatively light as most groups are showing moves of less than half of one percent. Oil stocks are the only group to tag the one percent line on the downside.

Bonds continue to shine as the TLT pushes past last week's best levels to hit a new annual high. The TLT is currently trading near 94.67 with the all-time high from June 2003 sitting near 97.66...

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Chart Chatter - SPX Daily

by 5/31/2005 12:03 PM
Stocks quoted in this article:

I know I promised to update the "set" of daily index charts we have been tracking but I am going to deviate from that and focus on the S&P 500 chart for a moment....Given the recent action (and my absence) I think that a more comprehensive review is better...


Created with SuperCharts by Omega Research

Here is the daily chart along with the downtrending channel we discussed recently, along with the 50-day moving average. I wanted to focus on this chart because it shows the breakout from the downtrend and you can see that the 50-day trendline has begun to flatten out.

It goes without saying that both of these are "backward" looking indicators, meaning this just shows us what has happened as opposed to predicting what may happen. However, I still think it is helpful to review as it is gives us an idea of which way the momentum is going. In other words, buying demand has overwhelmed selling pressure.

Last Monday I discussed how the low readings from the "fear gauges" were being contradicted by other indicators. Typically you need to get an extreme sentiment reading to derail a trend. Over the intermediate-term, the best description for the trend is sideways chop, but based on the chart above, it appears the bulls have the short-term wind at their backs.

The test now is to see if they can hold the SPX at the current support zone. If that fails, the area just below 1180 looks to be the next level to watch as it was resistance earlier this month and should be the approximate site of the 50-day moving average...

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