Oct. 6, 1999

Bias or no bias, stocks were not ready to collapse on the

news. The statistics continue to point toward a few more days on the upside. Let's not be confused, though: This is not a great rally. It is more a lack of selling rather than a desire to buy.

Should stocks continue rallying into next week, we will likely begin to see what we've seen for the past several quarters: profit-taking into earnings. Since it is most important to watch how stocks react to the news -- rather than the actual news itself -- if stocks rally before their earnings, then we would typically see profit-taking into that news.

By the time the earnings season rolls around sometime over the next week or so, we will have reached an overbought reading in the market. And if the indicators that predicted the rally do not improve (so that they may fuel the rally further) then they too will begin to roll over again and show us the way back down.

New Highs and New Lows

Overbought/Oversold Oscillator

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 any securities 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.