You can see that yesterday's rally hardly shows on the overbought/oversold oscillator. It appears that this rally will run its course, and in the end, it will fail to reach a greater overbought level than we did just a couple of weeks ago. In addition to the lack of upside momentum, it is also curious that the number of stocks at new highs does not expand. In a typical bull market, we would be seeing at least over 200 stocks at new highs by now. To date, that has not happened.
We may try the upside some more and maybe even eke out a few new highs in the averages, but I still expect that we will remain in this sideways/correction phase for a while longer, without breaking out to the upside in a significant way.
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