Oh boy! Did you see 'em giving out those

Dow

10,000 hats on the floor of the

NYSE

on Thursday? Yep, they were there.

Martha MacCallum

of

CNBC

even got one before they were whisked away for (hopefully) another day. It was a great tug of war between the bulls and the bears, without a clear-cut winner once again.

Maybe the bears won because we didn't get the close above 10,000. Or maybe the bulls won because the market didn't collapse. It soared instead, and maybe it's just a matter of time before we close over 10,000. None of that interests me nearly as much as the fascination everyone seems to have with this magical number.

While everyone's eyes are glued to that INDU quote on their screens, there are some underlying market indicators that don't seem to care how close the Dow is to 10,000. There are no party hats for them.

Let's take a close look at the overbought/oversold indicator. First, we are overbought, albeit moderately. Since earlier in the week, when this indicator stopped moving higher, it has simply churned. But yesterday, in all the glory of Dow 10,000? That's not a misprint -- it rolled over and headed down.

What should concern us more is the momentum of this indicator. See all the upside momentum we had at that overbought reading in late October/early November? That was bullish because we had gotten more overbought than any previous rally, which tells us how strong that momentum was and that it wouldn't turn around so easily. Then came the early January rally. The overbought reading couldn't get as high as it had in November. That tells us the January rally did not have nearly enough momentum to carry it further. From that high, we went into a prolonged correction/sideways move.

Here we are in the midst of the current rally, and it's pretty clear that this rally hasn't had the momentum that even the January rally had. Momentum has a lower high, and that means it's going to be difficult to get this market through Dow 10,000 and keep it there. A correction sometime in the next week or so now seems likely.

In addition, while everyone was busy watching the INDU flirt with 10,000, only 49 stocks were making new highs. To put this in perspective, we had more stocks trading at new highs when the Dow was at 9300! Oh sure,

American Express

(AXP) - Get Report

has been great, but even with its big up day on Thursday, it hasn't surpassed its Tuesday high.

I'm not picking on American Express as a negative stock because I have been recommending it and I still have a higher target near 150, but my point is that it's not just the Dow 10,000 close which is disappointing us. While the Dow is struggling to stay above that big number, many individual stocks which have been winners are also struggling to trade at new highs. That too says a rest is needed.

Finally, the NYSE finance index, which has been the catalyst for this entire leg up in the market did not make a new high yesterday; it is still below its Tuesday high. It is always best to be cautious when the market leaders get tired.

Since I feel the market is in need of a correction, I am hesitant to chase stocks, even the strong ones. For that reason, I recommend buying those stocks with big bases. In the DJIA, stocks with big bases include

Alcoa

(AA) - Get Report

,

Coke

(KO) - Get Report

,

Disney

(DIS) - Get Report

,

Hewlett-Packard

(HWP)

and

Procter & Gamble

(PG) - Get Report

, if it can ever break out through 94.

Elsewhere,

Delta

(DAL) - Get Report

has a big base, but it's now nearing its old high from last summer. One more dip down should give Delta a better base from which to launch a sustained move. Buy this stock into dips.

Schering-Plough's

(SGP)

chart looks quite similar to the way

American Home

(AHP)

looked just a few weeks ago before its breakout. In technology,

Motorola

(MOT)

is still a big long-term base.

On the negative side, the market seems a bit wary of

AT&T's

(T) - Get Report

big bond offering; breaking 80 would spoil the chart.

Eastman Kodak

(EK)

looks a bit shaky in here as well in the DIJA.

Outside the DJIA,

Bristol-Myers

(BMY) - Get Report

is still struggling and so is

Sara Lee

(SLE)

.

Lucent

(LU)

really needs to hold par.

Xerox

(XRX) - Get Report

continues to trade poorly. And I'm keeping my eyes on

Applied Materials'

(AMAT) - Get Report

current rally to see if it fails.

With the triple-witching expiration today, I won't hazard a guess as to which way the market will go. Momentum has slowed, and stocks are tired up here. In just over a week, the

Federal Open Market Committee

will meet, which means there will be much chatter about rates next week. Don't forget that three weeks ago Mr. Greenspan said he thought the market was overvalued -- and that was at Dow 9500. Do you think this rally has changed his mind? Maybe the NYSE should send him a party hat.

New Lows

Cumulative Advance/Decline Line

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in the stocks mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at

KPMHSM@aol.com.