This market is not yet overbought. That's just one of the reasons it has shown resiliency on the downside. The momentum is still on the upside for now.
Yesterday's negative performance in the advance/decline line was not good. Who didn't see that? But the way stocks sold off and closed on their lows on Tuesday is the same way many stocks rallied to close on their highs on Wednesday. It's almost like running in place.
With the momentum still poised on the upside, I will continue to give these statistics a chance to prove themselves. While I doubt they can do it, I continue to keep an open mind. If by the time the momentum shifts the statistics have not improved, it will be even more difficult to make a case for a sustainable upside move.
New Highs and New Lows
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