One of the things I struggle with is sentiment. I can usually tell when everyone is giddy (just look at the column I did on oil stocks two days ago; to me it was clear as day once I saw the charts of those small-cap speculative plays). I can usually tell when everyone is bearish. But it's when they jump from one camp to the other so quickly, without at least sitting on the fence, that I struggle.

Monday morning, folks are feeling good and bullish. The DJIA is up 150 and stocks were rocking. They don't care about the financials. I'd written an entire column that morning warning that weak financials mattered. But no one cares. "Don't pay attention to Helene; she's been talking about a correction since the final days of April, and here we are at 1440 on the S&P."

Then the market comes down and it doesn't really go down -- instead, it hovers at the flat line. So we pick up a few bears, but not enough to matter. Then Tuesday, the DJIA falls 200 points. But Apple (AAPL - commentary - Cramer's Take) and some of the horsies (not to mention the beloved oils) are all up on the day. So once again, that was fairly easy, because folks weren't too bearish. In fact, I see countless folks interviewed on TV telling us the market will be up on Wednesday.

Of course, Wednesday we have a morning bounce and an afternoon collapse. That collapse of 200 DJIA points takes the whole market down: banks, tech, even a few oils and of course the fertilizer names. (What happened? No one talks about them anymore! If they did, they might have to note that natural gas is used in making some of those fertilizers!) And my inbox fills with folks telling me the Bank Index is going to a new low. I suppose these folks didn't see this failure in the banks several days earlier?

And then on Thursday morning, I see various market pundits in sell mode. Calls for lower lows, calls for leaning bearish, downgrades of the brokers, yesterday had it all. Where was Goldman Sachs and their recommendation to buy the semis?

That is where the conundrum arises. We came down so far, so fast that folks were converted without even sitting on the fence! And that makes them leery of rallies now. They should be.

But it makes you wonder if the market doesn't need some kind of rally -- better than yesterday's! -- to get some of those bears questioning their newfound bearishness. Maybe such a rally would at least move them to the fence. And that would provide the now-missing right shoulder of a minor head-and-shoulders top.

If we do the measurement, we'd take the high of the pattern at 1425 (I almost always toss out spike highs and lows) and subtract the low of the pattern, 1375, to get 50. We then subtract 50 from the neckline around 1390 to get 1340. That low circled in green is around 1330.

This is just a different chart pattern than the DJIA that we looked at yesterday, but interestingly it works out the same way. The DJIA rallies back to the underside of the double top and the S&P gives us a right shoulder.

And that is why I am still talking about a correction. I might change if everyone who just jumped to the bear camp went back to the fence or the bull camp, but that remains to be determined. I suspect if we rally for a few days, they will leave the bear camp and we can be more bearish if the indicators warrant it, but for now, it's still a correction.

For those keeping score at home, we ended April at 1385 on the S&P and we now stand at 1394. Still sounds like a correction to me.

Overbought/Oversold Oscillators

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