The Daily Chartist: The First Rally Likely Won't Be the Last

But most first attempts after a low are failures, the Chartist says. Overhead resistance will keep the rallies in check for now.
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Up big in the morning and gave it back in the afternoon. So it was a failure, right? Yes, but all first attempts after a low are failures. It is a rare case that a first rally does not stop at the first layer of resistance. Just as selloffs find buyers when the market is in an upswing, rallies find sellers when the market has been on a downward path.

We are moderately oversold right, now so it's likely this rally attempt is not the last one. The shrinking number of new lows told us stocks had found a level from which to rally. However, the resistance overhead will likely keep rallies in check for the time being.

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