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The sentiment is the oddest part of this whole market. We've seen folks get giddy one day and downright depressed the very next day. Just look at last week -- the market did an up, down, up, down move. Each time we were down, folks loaded up on puts, and each time we were up they loaded up on calls.

Sentiment on Monday morning was so dreary I couldn't believe it. I even asked what it was that had turned everyone so bearish so quickly. But then came the down open -- barely down at that -- and the total and absolute lack of selling. It simply dried up, and it did so right at the neckline of the head-and-shoulders top as well as the 200-day moving average line.

I figure that bounce must be what turned folks away from that strong negativity at the open because by midday the Index put/call ratio had sunk below 100%. It ended the day over 100%, but not by much.

I did notice something else. As longtime readers know, I turned bearish and began looking for a market correction in late April. I was clearly wrong. But when we looked back at that action last week, we saw that the market had gone nowhere since early May. I don't know where all these folks have been but I must have heard, seen or read a dozen times Monday how the market had gone nowhere for eight to 10 weeks.

What surprised me is that such commentary came from the bulls. Did these folks really think we had actually gone somewhere in the market since early May? Isn't that why the 50-day moving average line has become important now as discussed Monday?

Thus far, no one seems to be commenting too loudly on the 50-day moving average line and the potential for a rollover there. So, was that the market correction, that sideways, go-nowhere market? I don't know. Not yet at least.

I know that when I look at the oscillator and the 30-day moving average of the advance/decline line they are not yet maximum oversold. I know that when I look at the numbers we are dropping going forward on these two indicators, I see a short-term rally (as I discussed on Monday) with the potential of a turnaround Tuesday followed by some more work on the downside.

However, what is even more curious is that sometime around July 15 we could find both the oscillator and the 30-day moving average of the a/d line oversold again. Much depends on what we do between now and then, but that is a possibility.

So what if the preannouncement season or the first week of earnings doesn't go so hot? We know what often happens when the first part of earnings season doesn't go so well -- folks then extrapolate that the rest of earnings season will stink too. And often we find we're surprised since by then the bad news is baked in.

For now my best guess is a short-term rally followed by another trip down. If that works out in such a manner we could have a better setup for a rally in mid-July. If it doesn't play out like that, then we might just continue to chop around with two- to four-day moves here and there, frustrating both bulls and bears.

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

Overbought/Oversold Oscillator -- NYSE

Overbought/Oversold Oscillator -- Nasdaq

Know what you own: Meisler mentioned earnings season. Some companies expected to report earnings this week include Alcoa (AA), Ruby Tuesday (RT), International Speedway (ISCA), Family Dollar (FDO), Pepsi Bottling (PBG), 3Com (COMS) and Chevron (CVX).
Helene Meisler writes a daily technical analysis column and Top Stocks. For more information, click here. Meisler trained at several Wall Street firms, including Goldman Sachs and SG Cowen, and has worked with the equity trading department at Cargill. 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.