It is now quite obvious that we are dealing with two totally separate markets: one made of the
, which are so heavily weighted in big-cap stocks, and then another comprising the rest of the market. And the rest of the market sat yesterday out (see the negative reading in the advance/decline line).
The oscillator tells us that we will be at a maximum overbought later this week, which suggests that the bounce in those big-cap stocks may continue a bit longer. In addition, other momentum indicators say we can climb for a few more days as well, but probably not much more.
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