Did you see the way that worked? The Russell filled the gap
and then led the way higher. Last night I failed to note the
Nasdaq's gap, but it too was filled and the index
Statistically, the market was quite interesting today, even
if dull. Breadth was rarely negative, but that is typical
when the Russell is leading upward. Copper bounced (see last night's
discussion on the subject). But for me, the most
fascinating part was the put/call ratios.
Can you say "oh my!"? The total put/call ratio, at 96%, was
the highest reading since February 4, when we made the low
and this sentiment indicator reached 99%. The equity
put/call ratio chimed in at 71%, which is the highest since
February 10. (The next day, the S&P 500 added 20
That's the good news. The fact that they saved them today
supports my view that if the market can stay up here for
another week or so, you will have a decent selling/shorting
opportunity in the latter part of March.
The bad news? The number of stocks making new lows on the
NYSE, at 41, was nearly twice that of two days ago.
It is now the highest reading since the early February low,
when we had 131 new lows.
Returning to the put/call ratio for a minute, these higher
readings have turned the 10-day moving average of the ratio
higher, which is typically bearish. Finally, the McClellan
Summation Index is trying to save itself, but today's
statistics did not do much to help it. And with the index so
high, it is hard to believe it will take a brand-new leg
higher from here.
We were not able to recapture 1875 on the S&P today; that
remains the level I have my eye on. Many will use 1870 and I
would not argue with them. But I have a small trend line
that comes in around 1875, and if we recapture that, the
look of the chart would change.
Read Helene's latest column
In light of the love for the social media stocks, I was
asked to revisit LinkedIn (LNKD:NYSE). I highlighted
the stock here a few weeks ago as a buy near $200, and with
a target near $210. While that seemed to be a good call, in
fact it was not, because the stock gapped up and never gave
you a chance to own it. However, with the price back near
$200, there is a clear stop at just under $198 and a first
target of $210. But the possibility of a breakout over that
line that would then generate a higher target -- still
undetermined, but perhaps in the $235-$240 area.
Why has this stock fallen so far out of favor?
The volume indicator should reach a maximum overbought level
at over 55% sometime in the next week. I am targeting the
end of next week for that.
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
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Well, the chart of General Motors (GM:NYSE) looks so
much like a textbook head-and-shoulders top that I bet even
the non-chart-reading folks can see it. But by now we know
the drill: The stock comes down to support/the neckline and
bounces. That bounce screams "sell me!" and so folks do sell
or they get short. And then like magic, the chart improves
and up it goes again.
Yes, I say this partly in jest. But how many times have we
seen a toppy stock behave in this manner? I think GM can
rally from here. It has fallen so far in a straight line
that if it were to break down from here, it would be
exhaustive rather than fresh. Therefore I will say this: If
GM cannot rally back over $37-ish, it really ought to break
on the next trip down. In a normal non-Fed-induced market,
it would. For now, $37 is the level to watch on this bounce.
I must admit that, not having seen the chart of
Barclays (BCS:NYSE), I was shocked to see it kissing
a new low. It almost looks like copper! The stock ought to
bounce, just because it appears so oversold. But there is an
unfulfilled target around $13.50, so while I expect a rally
to perhaps $16.50-ish, I do not think the decline is done
I was also asked to revisit the ProShares UltraShort 20+
Year Treasury ETF (TBT:NYSE). The fund did enjoy a rally
last week with that W formation we noted, but it stopped
right at that $72 resistance once again. The chart says it
should find some support here at this $70-ish area and have
another rally attempt. Look for this to settle down in the
next few days and rally one more time. If it fails to get
over $72 (the flat resistance line) on that rally --
if we get that rally -- then start looking for lower
prices. For now, it seems to be in a trading range, with
some hope of going over $72 for the breakout.
If the S&P can recapture 1875, it will get saved once again -- and we will have to wait until later in March for the market to retest.
The pattern for two weeks has been one nice up day and the rest choppy, so I'm not expecting a long string of increases.
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