Statistically the market got better late last week. You can see the number of stocks at news highs finally rose past that 82 level we saw in mid-March. In addition to that acceleration, the advance/decline line actually put in two days of back-to-back positive readings. These days, that has become a chore for this market, so let's give it some credit for that action.
However, the problem is that it took the market so long to get in gear that it ran out of momentum just as things were getting better. (I have a button that says "If it looks great, it's too late!") We have moved into a moderately overbought condition and can now expect rallies to be more difficult, making the downside the current path of least resistance.
In conclusion, it's more of the same action we've been witnessing -- big ups and big downs. It's the downside's turn this week.
New Highs and 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.