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This story was originally published on RealMoney at 6:58 a.m. EDT on Wednesday, June 24. For a free trial subscription, click here.

Will the

Federal Reserve's

decision Wednesday on interest rates bring us fireworks or more dullsville? Because Tuesday was surely dull. The bulls will say never short a dull market. The bears will say Tuesday was a consolidation day off the decline.

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I will say what I have been saying: I still think there will be a rally at the end of the quarter based on the upcoming oversold condition as well as the high put/call ratio. The end-of-day reading for the total put/call ratio on Tuesday was 100%. That is the second reading we've seen in triple digits for this indicator in a week. Folks haven't been this bearish since before the lows in March.

This isn't to say that the newfound bearishness isn't without merit. Many stocks have fallen 25% to 30%, and in some cases they have fallen a lot faster than they've gone up.

The intermediate-term indicators have rolled over. The McClellan Summation Index has rolled over for both


and the

New York Stock Exchange

. The 30-day moving average of the advance/decline line isn't yet maximum oversold (

as discussed Tuesday, it ought to have a respite to the upside between now and the end of the quarter). The 10-day, 30-day and 60-day moving averages of the put/call ratios are all well off their lows and rising.

Over on Nasdaq, the number of stocks making new lows is now the highest since we were at or near the lows of the market. Now, the absolute number is quite small at 19, but when you consider we haven't had this many new lows on Nasdaq since late March, you realize that stocks are outperforming on the downside since Nasdaq was trading around 1500. Considering that Nasdaq's now trading around 1765, you can figure that a decline back to 1500 would show a lot more new lows. That isn't good.

I would like to revisit the chart of oil. For a few weeks now I have said I thought oil was at its upper limit and due for a pullback. In fact, I said a move over $70 wouldn't be sustainable. It has since pulled back. Now we have an interesting chart on our hands. Oil has rallied back to just shy of $70, as you can see on the chart.

Here's a general rule of thumb I use: If we break a trend line and we recapture it quickly then the break was a fakeout, not a breakout. So this becomes a test for oil now. It broke that uptrend line and has now rallied back. If it can't recapture it in a few days then it will look as though it is a real breakdown and maybe even a head-and-shoulders top (although I doubt such a pattern would find its way into a textbook).

I am picking on oil because there was a time that the market would rally when oil rallied, but on Tuesday that wasn't exactly the case. Have the two diverged? Or will one play catch-up?

I think it will be interesting to watch since I'm still looking for an end-of-the-quarter oversold rally to give us a potential

right shoulder

in the chart of the

S&P 500


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



At the time of publication, Meisler had no positions in the stocks mentioned, although holdings can change at any time.

Helene Meisler writes a daily technical analysis column and Top Stocks. For more information,

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. 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;

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