It's a Coin Toss Short Term

It seems it was the word "retest" that threw everyone for a loop in my column on the TRIN readings (TRIN, or the Arms index, was developed by RealMoney's Dick Arms) early Friday morning. It seems there are a variety of interpretations of that word.

To me a retest can be a higher low or a lower low. In the four examples I showed, I stated two were higher and two were lower and I had no idea which way this one would turn out. I said it was a 50-50 chance it could do either.

So I ask you to step back and see the bigger picture which says the retest is bullish, not bearish.

If I knew if the retest meant a revisit to 750 or Friday's low at 850 on the S&P 500 I would tell you. But I don't know. I find the short term unclear in my work. We are no longer overbought, but we are not yet oversold. We have an expiration week -- the last one of the year -- which will more often than not lead to wild swings in both directions. So I'd consider the near term a coin toss. A coin toss doesn't mean bullish, and it doesn't mean bearish.

I could tell you that Friday's reversal came on light volume and that would be bearish. But then I could say that we bounced off support at 850 and that would be bullish.

I could tell you that the put/call ratio stayed high all day, and into the close, and that would be bullish. But I could also tell you that the members' short ratio is now the highest since mid-August and that would be bearish.

I could tell you that the new highs are pathetic, even relative to a week or so ago. That would be bearish. But then I could counter that breadth has been much better of late. That would be bullish.

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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.