April 26, 2000
As soon as the tech stocks tanked and folks began touting the Old Economy stocks, it seemed that the group that got favorable mention over and over again was the financials. For this reason, I took a look at the
New York Financial Index
This chart has been working on a base for almost a year. It's not a great base because there's a pattern of lower highs. This means that each rally has failed to get back to the level of the previous rally, and each time it failed, it came down and made a lower low. A better pattern would have found the rallies reaching to the previous rally levels and lows that held at higher levels.
However, there's been a slight change in the pattern recently. The mid-March high stopped at the downtrend line, a lower high, like all the previous rallies -- only this time, the ensuing selloff didn't make a lower low. This is the first time in a year this has happened, and makes it easier to imagine these stocks bottoming.
In order to complete this bottom, a move through 550 is necessary. Crossing 550 would not only cross a downtrend line that's been in place for over a year, but would also surpass the previous high. Meeting those two conditions simultaneously would confirm the move.
For an explanation of these indicators, check out The Chartist's
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