So we were brought back from the brink. The market tried to break, it really did.

It even had a mini "whoosh" in the middle of the morning, but you might have noticed that two factors missing from that whoosh have been present in previous, really good whooshes.

The first is that the VIX did not jump -- in fact, it barely moved off the level it's been.

The other factor is that in previous whooshes the advance/decline line, not the market averages, has typically led the rally. This time we had the Dow Jones Industrial Average and S&P 500 hanging tough and the a/d not keeping pace. It's sort of like an old-fashioned negative divergence.

I believe that is the result of the group rotation we continue to see. This rotation lasts for about two or three days at most, but it continues to keep the market averages from breaking down. And it makes us all daytraders.

On Tuesday, it was the banks that worked the upside. They continued again yesterday, but we all know that another couple of days and they too will falter. Then on Wednesday folks liked the retailers, and maybe they will keep liking them for another day or so before they scamper on to something else.

What will that something else be? Well, we know they will eventually get around to tech -- they always do.

In the meantime the new lows on Nasdaq continue to expand while the new lows on the NYSE contract. Couple this with the oscillators being close to the same levels they were at in mid-February and we have the potential for another lousy rally.

The problem I see is that a rally from this point would not provide us with the proper set-up in the indicators for the rally to be a long-lasting one. We would need an up day or two in here that leads to another whack for us to have a better rally. It is then possible that such a decline would provide us with the time needed to get the indicators where they need to be for a better rally.

Should we rally from here we're looking at a rally that gives us more of what we've had lately: group rotation that lasts a few days before moving on to the next group, with the result of stair stepping the averages higher but making us all feel like we could use a little more excitement.

The Investor's Intelligence readings yesterday did not move much from the previous week, so there is little we can discern from them. However, should this morning's release of the American Association of Individual Investors show a major shift to bearishness in its survey this week, then I would look for a rally.

Overbought/Oversold Oscillators

For more explanation of these indicators, check out The Chartist's primer.

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 the 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; click here to send her an email.

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