The Daily Chartist: Counting Our Correction Blessings

The correction may not be over, but The Chartist is focusing on the good news.
Author:
Publish date:

Dec. 2, 1999

While it's hard to imagine the correction is over just yet, I've decided to focus on some of the positives.

Technical Analysis: Join the discussion on

TSC

message boards. First, the

NYSE

has reached an oversold reading. Remember, oversold doesn't mean it has to rally, but it makes it much easier to rally.

In addition to the oversoldness on the NYSE, I have included a chart of the

S&P 500

, which shows a very similar pattern exactly a year ago. The July highs in both years came within days of each other and then pushed the S&P into an extended correction. Each year the low came in October and rallied to the old high in late November.

Last year, the S&P experienced a two- to three-week correction, which ended in mid-December and was followed by a push to new all-time highs. If we are to imagine a similar pattern again this year, the next push higher on the S&P could very well take this average to all-time highs again.

The S&P 500

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.