Have We Witnessed the Low?

This column by Helene Meisler originally appeared on RealMoney earlier today. To read all of her commentary and other incisive market analysis, click here for a free trial.

Have you noticed how many times we have seen the day before expiration as a low in the market? Back in March, the Bear Stearns low was on March 17, the week of expiration. Back in July, the "bank" low was on July 15, the Tuesday before expiration. In November, the low was on Nov. 21, which was expiration day.

So it should come as no surprise that if Thursday was a short-term low that it came during expiration week. I wish I had realized this Thursday when I made my comments in Columnist Conversation.

Was Thursday the low? I don't know. I know that we often come down the day after expiration and my oscillator is still not maximum oversold so we could easily give back some of Thursday's gains in the next few days. I find it hard to believe, however, that we would give back all of the gains.

As I've explained over the past few days and as I explained in Columnist Conversation Thursday, we're heading toward oversold and euro/yen has started to hold. Keep your eyes on this indicator in the coming days because if it can really hold and not break -- and can recapture 120 --then the oversold rally thesis I have had should work. And it ought to work for more than a day.

By now it should be pretty obvious to all who scoffed a week ago that the financials do matter. But they should have some sort of oversold rally, especially as the market gets toward maximum oversold. The key question for me will be if they can outperform. Remember, they don't have to lead, they just have to keep pace. That ratio will have to get in gear on the upside.

As for this newfound love for tech: Well, it should last a while longer since it's not yet overdone. But I've got my eye on the ratio of Nasdaq relative to the S&P 500. Typically when this relationship gets up over 1.8 and then reverses (so just a move over 1.8 doesn't do it) along with a rolling over of the McClellan Summation index for Nasdaq (it's hovering, it hasn't rolled over yet) it means the technology ride is done.