Helene Meisler writes a daily technical analysis column and TheStreet Top Stocks. For more information, click here. Meisler spent more than a decade on the sell side as a market technician covering institutional accounts at various investment banks in New York City, including Cowen & Co. and Goldman Sachs. In addition she worked at Cargill in Minneapolis where she managed equity money for three years. She received her bachelor's degree in business from Pace University.
Breadth appeared healthy on Monday and the new lows on the New York Stock Exchange were encouraging -- we might even be up Tuesday -- but this chart is stubborn.
But the short-term overbought reading should lead to a market pullback, and that should be followed by another rally attempt.
I believe the final two days of last week when the market did a lot of meandering is the result of this short-term overbought condition -- and then there's the overhead resistance.
Ongoing weakening in breadth and a further lack of improvement in the number of stocks making new highs would be two of several signs of concern.
We're starting to struggle to make headway as upside momentum slips and breadth falls flat.
The market moves to a short-term overbought condition on Thursday, breadth has been positive, and the intermediate-term indicators are still positive, so I expect a dip or a pullback, and then we rally again.
Folks have not been terribly bullish throughout this rally, Wednesday that changed, so let's check the indicators.
Let's look at the indicators and charts as we get to overbought, while breadth is healthy but showing signs of concern and the banks are on fire.
The down and outs were up and the growth names down, but let’s talk about the market as we get closer to overbought.
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