The Daily Chartist: Oversold Rallies

We had an oversold rally yesterday, and we can expect another today.
Author:
Publish date:

July 28

Yep, it was an oversold rally. What came down went up. Everything else stood still. This is the reason for those lousy statistics in yesterday's rally.

However, the market is still oversold, so we can continue to expect more upside in the form of an oversold rally. Even if

Alan Greenspan's

conversation with Congress on Wednesday is not received well by the markets, the oversold condition should provide some near-term support. If the quality of this oversold rally stays poor, we can expect the market will return to the downside when the oversold reading is worked off.

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.