The Daily Chartist: Don't Blame the Rates

Plus, two indicators could signal an end to the selling.
Publish date:

Dec. 15, 1999

OK, so now they're blaming yesterday's


selloff on higher interest rates. Sure, I think higher rates will affect the market, but c'mon, just less than two weeks ago rates were at 6.32% and what did the Nasdaq do then? It was up 99 that very

day. Rates got up to only 6.30% yesterday, so let's just say the media needed something to pin the selloff on, and the tick-up in rates gave it to them.

Technical Analysis: Join the discussion on


message boards.

With a correction well under way, especially on the



S&P 500

made its high 10 days ago), perhaps we ought to look further out than the next few days. The NYSE is going to be maximum oversold by Monday, Dec. 20, coinciding closely with the


meeting. Now, being oversold is not enough to get a market going again on the upside. We should watch for the following two indicators as a sign the selling is coming to an end:

    The utilities. Sure, they were down yesterday, but only by 20 cents. Should the selling begin to subside and find a bottom, it would be the first time since early November. The number of new lows. Should this number begin to contract, especially on a down day, it would be the first positive sign for this indicator.

We need these two indicators to give some positive signs, so that we can feel better about the health of the market. Without a turn in them, we can continue to expect more of the same.

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 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