Lousy Statistics Are Hard to Spin

Sometimes I just prefer to list the facts, and so I will.

Let's begin with a bit of math. Breadth has started to lag the market on almost every rally. We can see it in the chart of the cumulative advance/decline line and the cumulative volume charts that I have shown here and will show again in this article. But let's just compare last Thursday's 14.90 loss in the S&P 500 with Monday's 14.86 gain in the S&P.

I think we can all agree that we'd call that even on the gain and the loss. But breadth lost 1,918 last week and gained 1,678 Monday. That means the S&P was even and breadth lost 240 issues.

And I won't even go down that volume routine. Oh, OK, I will. Total volume on the New York Stock Exchange last Thursday was 1.08 billion -- that was the down day. On Monday, we didn't even reach a billion, coming in at 979 million. But sometimes it's the difference between up volume and down volume that can make it a positive spin -- but not this time. This time last week we lost 836 million shares and this week we gained 626 million shares. So the net of it all is a loss of 210 million shares.

I won't bore you to death with Nasdaq, but suffice it to say it's the same story.

How 'bout new highs? In mid-October, there were 462 on the NYSE. Last week, when we were last up in this area, there were 318 and I complained about that. This week: 190. I don't care how bullish you are, there is really no way to spin that positively. One hundred ninety is clearly less than 50% of what we had at the peak.

Once again Nasdaq has the same story.

And then there is sentiment. Where did all those raging bulls come from? Out of the woodwork, it seems! The total put/call ratio sunk to a reading in the 60s. We've had one of those once a month for the past three months. The chart of the Russell 2000 shows the exact dates we had those readings. You can see we didn't turn down immediately, but we didn't continue zooming on ahead. Rather we milled around and then fell -- all three times.

I should note that the Index put/call ratio fell to 93%. Readings under 100% have become rather rare. The last time we had one was two months ago, on Sept. 21, which is three trading days after the middle arrow on the chart above.

And we're not oversold.

Since I hate to end on such a negative note, I would point out that the Bank Index closed near its high of the day and the ratio of the Bank Index to the S&P continues to lift.

But if that's all I have to hang my hat on, then I'd still say the market is a tough call this week as it is not oversold enough for me to think we can keep going up well with these lousy statistics.

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Know what you own: Meisler mentioned the S&P 500. Some stocks in the index are Dell (DELL - commentary - Trade Now), Nike (NKE - commentary - Trade Now), Lockheed Martin (LMT - commentary - Trade Now), WellPoint (WLP - commentary - Trade Now), Ford (F - commentary - Trade Now), EMC (EMC - commentary - Trade Now) and Time Warner (TWX - commentary - Trade Now).

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At the time of publication, Meisler had no positions in any stocks mentioned, although holdings can change at any time.

Helene Meisler writes a daily technical analysis column and TheStreet.com Top Stocks. For more information, click here. Meisler trained at several Wall Street firms, including Goldman Sachs and SG Cowen, and has worked with the equity trading department at Cargill. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback; click here to send her an email.