Editor's note: This column is a special bonus for TheStreet.com readers. This piece originally appeared on RealMoney today, and we're giving you a sneak peek at the entire column. To sign up for RealMoney, where you can read Helene Meisler's commentary regularly, please click here for a free trial. The bad news is that the market didn't have an automatic rebound Tuesday like it has in the past two months. The good news is that the raising of the terror alert didn't take the market down very much. Things don't go down easily, but they didn't exactly go up well, either. And that's what brings about a correction. For now, the market seems to have found the levels it hit nearly two weeks ago, on May 8, as support. The next few days could see more rally attempts. As I looked at a chart of the Dow Jones Industrial Average after Tuesday's close, I could see how folks can find something both bullish and bearish in it.
You can see how it broke that uptrend line, so I'm sure some are saying this is bearish. Admittedly, it isn't bullish, but this is a very steep uptrend line and a very short-term line as well, so its break is not of major importance.
Here, you can see that when we draw in a different sort of trend line, this chart actually appears bullish. It looks like we've had a correction to the breakout and we're holding. As usual, I'd prefer to look at the underlying statistics rather than charts of the averages. The underlying statistics are not weak; they simply got exhausted and lost their upside momentum. And that exhaustion has led to a correction.