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The Waiting Game

Despite three good pieces of economic news, this market can't seem to string together a few decent up days. And so we wait.

Sept. 17, 1999

These days, the market feels like the checkout line at the grocery store. You know how it is: No matter how carefully you choose your line, it inevitably is the slowest, or the one where the cashier screams, "I need a price," and while you wait, everyone else moves right along.

So we waited with bated breath two weeks ago for the

employment number

, expecting it to move the market. It

did . The


soared more than 200 points that day; it is now trading 350 points lower. The


was up 100 on that fateful Friday; it now sits 40 points lower. The


is also significantly lower today than it was then.

After that employment number, we waited patiently for last week's

Producer Price Index

. Surely that number would

move the markets. The DJIA was higher on the open and closed lower. The other two averages fared better, but also well off their best levels.

OK, then we waited for the

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Consumer Price Index

. After all, the CPI moved the market significantly back in May, right? The CPI came in benign, and we rallied -- only to

close lower on the day.

And since that employment number, we've only had one day on the


where the advance/decline line has been positive. The Nasdaq has had two. Of course, with these sort of dismal statistics, the number of stocks at new lows has expanded with each downdraft, rather than contracting and showing positive signs.

We have now had three good pieces of economic news for this market, all while it's been oversold and can't seem to string together a few decent up days. That is bothersome. And we can't very well blame it on the bonds anymore, can we? They certainly haven't participated on the downside much in the past few days.

No, this time it's not the fault of the bonds: Stocks are falling because of selling -- or maybe even a lack of buying. Just look at the cumulative volume chart; it broke the previous lows it had held in August.

But wait! How come the market doesn't fall apart? How come the DJIA is not selling at 10,000? How come the S&P closed


on the day yesterday?

Because the selling is not aggressive. Most stocks are moving down in eighths and fourths. We are seeing deterioration in a lot of stocks. For example,



was down from 40 to 32.



got oversold, rallied a buck or two and fell 4 as soon as the oversoldness was relieved.

International Paper


took a huge leap because of some positive comments at a conference, only to spend the next three days retracing its steps.

The selling has not been very aggressive partly because of sentiment. As far as sentiment is concerned, there certainly are fewer bulls out there. Bullishness at 41% is the lowest number we've seen since last October's lows. But the funny thing is that this time, they're not becoming bears. (The bearish reading sits at 31%, well down from its peak reading of 47% last September.) They are simply bulls who are now correction-minded.

You can see how many are looking for a correction now, the most in more than 15 months!

In an environment like this, it is difficult to find stocks that can make you any money. It's like trying to pick the right checkout line. Feels like no matter which one you pick, you're likely to have chosen wrong.

I continue to write down

Procter & Gamble


as a good chart.



likely needs a bit of time to repair itself from the European recall news, but it held support well.

The cereal stocks are still building those bases.

General Mills





are my favorites.



is still my favorite tech stock, and



continues its base-building.

On the negative side, the retailers continue to stand out. Since they are quite oversold, I would use bounces to sell them. Gap,

Dayton Hudson





are on my list.

With the market still in an oversold condition, a huge rally is not only possible but likely at any point. However, as the statistics continue to deteriorate rather than improve, I remain suspicious of any rally's staying power. What to do in the meantime? Why, wait, of course.

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