Statistically, today was not a pretty showing. But we did
bounce off 1790 on the S&P, so I would be surprised if we
did not try to bounce to green tomorrow. A red opening would
probably lead to short covering.
Breadth was not good today, and new lows on the NYSE
increased to 87 -- a level we have not seen since early
October, when the S&P was 100 points lower. So if you feel
as though your stocks are going nowhere, this is the
indicator that says they probably are not keeping up with
the S&P. This is why we pay attention to negative divergences.
The day's most interesting statistics were from the
Investors Intelligence survey. There are now 57.1% bulls,
the highest reading since April 2011, when the figure was
57.3%. But before thinking, "Uh oh, 2011," recall that the
big decline that year came in August. In April, the topping
process was just beginning.
In other interesting points from the II survey, bears
slipped a smidge to 14.3%. So when you hear folks on
television say that plenty of bears are out there, be
careful. According to this survey, which has been around
since the 1960s. there are not plenty of bears around.
Further, in mid-September, when the S&P was at 1550, 40% of
folks were looking for a correction. Now, with the S&P more
than 200 points higher, just 28% of respondents are looking
for a correction. The spread between bulls and bears is now
42.8, which is quite stretched. The peak reading in April
2011 was 41.6.
The best news of the day is that we bounced off 1790 and
have come off that trend line I drew in last week on the S&P
chart. My best guess is that we will have a short-term
bounce and come down again. Resistance is still in the
Read Helene's latest column
I am not sure I trust Coca-Cola (KO:NYSE), but if the stock
gets over $40.50, expect that some momentum folks will call
it a breakout. Although it would measure to $43, I would
project $42-ish, because that old high would cause it to run
I was asked to follow up on Joy Global (JOY:NYSE), a chart I
have liked for a few months now. As long as the price stays
over $54, I still think that the chart is bottoming. The
target remains in that $59-$60 range, although the stock did
get up around $59 twice already.
The McClellan Summation Index is still pointing down.
Helene welcomes your questions about Top Stocks
and her charting strategy and techniques. Please send an
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please remember that TheStreet.com Top Stocks is not
intended to provide personalized investment advice.
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I was asked to follow up on Ctrip (CTRP:Nasdaq), a chart we
looked at a few weeks ago when the stock was around $50. At
that time, I thought it was a sale/short on a rally. Little
did I know that in this market we could see a stock fall 10
bucks in a straight line. Shocking!
There is still the possibility of an unfulfilled target on
the downside just under $40 (and a gap fill). But the first
target was met when the stock got to $45-ish. My inclination
now is that you should take no position, but if it crosses
that downtrend line, you would want to buy the move back
down. So if CTRP rallies over the line to $50 (resistance),
buy the pullback to test the downtrend line. If it does not
cross over the line, then the downtrend remains intact.
I do not know what to do with the chart of BlackBerry
(BBRY:Nasdaq). It should come down and tag that line around
$6, but do you really want to buy this? There are other
charts to speculate on; this one does not seem to be worth
I do not much like the chart of ExOne (XONE:Nasdaq) because
it seems to be in the middle of nowhere. If it rallied to
$60-$61, I would suggest selling; and if it broke $50, being
concerned. At $55, it is just stuck in no man's land.
Since we got into the rarefied air above 1780, the last two weeks have been a total chop fest.
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