May 3, 2000

Overbought and nervous. That's what this market is, and that makes for a rather skittish environment, especially with the

productivity

numbers to be released on Thursday and the

employment

number on Friday.

As discussed in yesterday's column, the

Nasdaq

is now short-term overbought. So is the

New York Stock Exchange

. In addition to the overbought readings, the Nasdaq could not manage to get through its first resistance at 4000 without turning back first. For these reasons, I continue to believe there is more work to be done.

One of the key indicators I'm watching here is sentiment. Yesterday's put/call ratios stretched higher than they did recently. On the

Chicago Board of Options Exchange

, the ratio for individual stocks was 0.58, the highest reading we've seen since the day before Good Friday, when it was 0.75.

However, this is not the number that caught my eye; it was the put/call ratio on the

OEX

that appeared quite high to me, as that reading was 2.05. This reading says there were two puts traded for every 1 call. Should sentiment continue to head in this too-bearish direction, it would eventually turn into a positive for this market.

(For those unfamiliar with the put/call ratio, it is a contrary indicator. When investors are bullish, they buy calls, giving us low readings. When investors are bearish, they buy puts, giving us high readings. Too much bullishness is bearish and too much bearishness is bullish.)

Overbought/Oversold Oscillators

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.