Swings in Sentiment

Sentiment is all over the map. Monday there were too many bulls. On Tuesday there were too many bears, and on Wednesday we were back to too many bulls.

Are folks that confused here? Or were they all trying to game the end of the quarter and now they are trying to game the employment number?

What surprised me the most was that we moved down most of the afternoon, and typically when we do that the Index put/call ratio, which was under 100% almost the entire day, would start to "rally" late in the day. But that never happened. That's why I wonder if folks are trying to game the employment number that will be out later today.

Away from that, there wasn't much else going on in the market. Breadth was terrific; no, make that superb. I fully expected when I posted my stock charts Wednesday night I would see all sorts of terrific-looking moves in the charts. But I discovered why the breadth was so good: There was a ton of stocks that closed up a penny or two after having been up quite a bit more.

But that's rationalizing an indicator, so instead I'll report that the cumulative advance/decline line made a higher high Wednesday. This is the first time it has done so without the S&P 500 doing so.

The problem (there's always a problem, isn't there?) is that the volume has been so pathetic that the cumulative volume line is still lower than the June high, which was lower than the May high.

Bullish news is that the number of stocks making new highs on the New York Stock Exchange increased to its largest reading since the lows of March.

In the bad-news arena, Nasdaq's new highs lagged. The McClellan Summation indices, after all this rallying, only have managed to finally stop going down. They haven't exactly turned back up.

And as I'm sure you saw, the banks were basically red all day, which doesn't help the ratio of the Bank Index to the S&P. Although that ratio has yet to break down to a lower low yet, it is hanging by a thread now.

All in all it was another up day with little or no buying pressure. One day either the bulls or the bears will take the wheel and we'll drive out of here. Everyone seems to think that earnings will be the next big driver of stocks. The funny thing is that everyone is waiting for two weeks from now when earnings reports start rolling in. What if we get some preannouncements first? Maybe that will move the market too.

Have a great Fourth of July!

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For more explanation of these indicators, check out The Chartist's primer.

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Know what you own: Meisler mentioned the Bank Index. Some banks in the index include Wells Fargo (WFC - commentary - Trade Now), Citigroup (C - commentary - Trade Now), Bank of America (BAC - commentary - Trade Now), KeyCorp (KEY - commentary - Trade Now), Fifth Third Bancorp (FITB - commentary - Trade Now), Northern Trust (NTRS - commentary - Trade Now) and Bank of New York Mellon (BK - 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.