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I see that China has people worried about steel stocks. (What a great call by Street Insight's Doug Kass to short that sector Monday morning!) Folks are then making the connection that if you're going to worry about the Chinese and steel, doesn't it stand to reason we need to worry about the oil stocks as well?

I worried about the oil stocks on Feb. 28, when I posted my now-famous comparison of ExxonMobil ( XOM) to Qualcomm ( QCOM). In case you haven't noticed, folks, ExxonMobil is right where it was that day: Its Feb. 28 high was $64.04 and it closed yesterday at $63.10. This despite oil's $2-plus rise in the same time frame.

And no, I'm not picking on oil again, but while we're on the subject, have you noticed that when oil first traded to that $40 level, folks were chatting about oil between $30 and $40? Well, prices never came back under $40 so it took a while, but then they began to chat about oil between $40 and $50, and that $50 would be the choke point. Remember that? Remember when folks thought oil prices over $50 would cut things off?

Well, now people are talking about oil between $50 and $60, and they're using $60 as the choke level.

I bring this up only because this is not that different than the way analysts were raising price targets and earnings estimates for the tech companies back in the late 1990s. When investors fall in love with a group, their actions are no different. Human nature does not change.

But back to the oil stocks. I actually think the action in a stock such as ChevronTexaco ( CVX), or even ExxonMobil, is good. They are consolidating their moves; they have gone nowhere for over a week now. Go back to their previous sideways moves and you will see that they were digestion periods. Sometimes it's best to think of stocks as humans: If you ran up 20 flights of stairs, you'd need a rest before going another 20 flights. If you didn't take that rest, you might subject yourself to a major stumble back down those stairs. So rest stops are healthy.

For the market as a whole, we are now in overbought territory on the NYSE. The Nasdaq is setting up quite differently, as it will actually be oversold sometime next week. I will expand on that later this week.

Over on the NYSE, the McClellan Summation Index is teetering. One more down day and it will reverse course back to the downside; not that the upside has been so terrific. In fact, I cannot recall another time where the cumulative advance/decline performed so well and didn't drag the McClellan Summation Index along with it. This time the McClellan Summation Index has lagged in a meaningful way and now threatens to head back downward again.

As I said Tuesday , there remains a fair degree of skeptical sentiment about the market now, so unless that changes, the decline is likely to be contained to a few percentage points.
Helene Meisler writes a technical analysis column on the U.S. equity markets and updates her charts daily. Meisler trained at several Wall Street firms, including Goldman Sachs and SG 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 and invites you to send it to hmeisler@thestreet.com.