March 9, 2000

With all this talk about the New Economy vs. the Old Economy, I realize these phrases have almost taken the place of bulls and bears. When we talk about the Old Economy, we must be speaking bearishly, and when we discuss the New Economy, we must certainly have a bull hat on.

This has become evident in all the usual sentiment indicators we watch as well. Since mid-November, the

Investor's Intelligence

bullish and bearish sentiment readings have barely budged. I have been watching these indicators for many years, and I have never seen such a lack of movement. In addition, many folks are watching the put/call ratios, but they don't change much either these days.

With such a high level of complacency in the market, it's hard for me to believe the market will continue along this merry path. Heck, is there anyone out there who doesn't know the Old Economy stocks stink and the New Economy stocks are hot? If there is, he's been living under a rock for quite some time. For this reason, I am now watching more closely for signs of a bottom in the

NYSE

, or Old Economy stocks.

And we are seeing one or two minor improvements on the NYSE. I emphasize minor, but when we've had a debacle such as we've had there, we can't expect change to come quickly. First of all, the number of stocks making new lows is not expanding anymore, and that is good news. It has even contracted in the past two days, telling us that perhaps the selling is finally coming to an end. For example, you may notice that

General Mills

(GIS) - Get Report

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and

Kellogg

(K) - Get Report

have been stabilizing for a few weeks now, trying their hardest not to participate on the downside. Of course, this doesn't mean they're great charts, but the selling needs to stop before the buying can begin.

While I still believe we will see some selling next week in advance of the

Fed

meeting, I'll be focusing on whether or not these Old Economy stocks are holding. And if they show the first signs of holding, and the oscillator does not get more oversold than the previous reading (showing a loss of downside momentum), I believe we may see the first signs of a bottom in those Old Economy stocks.

We'll let these stocks tell us, but maybe their glasses are really half-full instead of half-empty.

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.