May 8, 2000

Well, if Friday's action didn't take all the worry away from market players! Almost every voice heard thinks the way the market shrugged off the stronger-than-expected economic news was bullish. And it was. Except for a few minor details.

The volume was stinko! There is no other way to put it. When volume shrinks instead of expanding it tells you there is a lack of conviction out there. And just to compare apples to apples, you can see that the May 1

Nasdaq Composite Index

was up 97 points on 1.5 billion shares, which everyone thought was light volume. So, why then does everyone think that a rise of 96 points on Friday on volume of 1.2 billion shares is bullish?

And in keeping with the apples to apples comparison of Monday vs. Friday, the advance/decline line comparison was not very bullish either: Monday +998 vs. Friday +591. (The

NYSE

fared even worse: Monday the S&P was +15 with an a/d of +917 vs. Friday's rally of +23 on the S&P with an a/d of +419.)

These are not the kind of statistics that give me confidence; they are the kind that make me nervous. At this point, I continue to see signs of improvement on down days, with the up days lacking the type of conviction that makes for sustainable rallies. I believe this type of action will make for choppy markets as we head into next week's

FOMC

meeting.

Overbought/Oversold Oscillators

For an explanation of these indicators, check out The Chartist's

primer.

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.