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It Didn't Feel Like an Up Day

We could see some positive seasonality this week, but I do not expect much upside to come from it.

The Market

Oh yes, we got our "up" day today. But it felt more like a hard down day -- unless you consider rallying 20 points after being down more than 10 points a good day.

Most disconcerting for the bulls was the increasing number of stocks making new lows. The good news was that we did not see an expansion beyond last week's readings. On the Nasdaq, 128 new lows were made last week when the index was at 3946. Today, 110 new lows were reached when the Nasdaq got down to "only" 4014. In this case you have to ask: If the Nasdaq falls another 60 to 70 points, will there be more than 128 new lows? As of today, the answer was yes.

And the NYSE did not fare much better. The low reading on the index two weeks ago was just over 1800; today it was 1850. Then, 62 stocks hit new lows, while today, 52 did. Again, no positive divergences were seen today, but we would need to revisit the previous lows for any to surface.

Is it possible that we made a W today in the market? Sure. But in my view, a real positive divergence can only come when the index posts a lower low while the indicators make higher lows and fewer stocks hit new lows on the various exchanges.

Many market watchers may argue that there was panic today. Well, if there were, why didn't the Market Volatility Index (VIX) get jumpy? And why was the put/call ratio lower than Friday? It closed the day at 90% -- which leans a little high, and maybe it is a little high considering the S&P 500 closed up 6 points. But once again, the session felt like a down day.

In addition, breadth, while positive, did not reflect an up day in the market. Net volume was negative by 640 million shares on the NYSE. On the Nasdaq, it was negative by 770 million shares.

Then there is the 200-day moving average line for the Russell 2000, which we are sitting at or near. The line comes in just over 1110, and the index closed at 1117. It should provide support the first time down, as it did two weeks ago. But each time we hammer away at it, we eat through more of the support.

We will see some seasonality in this last week of April. On Tuesday and Wednesday, the Federal Open Market Committee meets. Fourteen of the last 16 Tuesdays have been green. So I will repeat what I said this morning: While we could rally in the near term, I do not think we will go anywhere special on the upside.

Read Helene's latest column here.

New Ideas

While I have hammered away at the biotech stocks, if you want to watch one group for a sign that the selling is abating, then look at the Biotech iShares ETF (IBB:Nasdaq). It did not make a lower low today. In fact, if it rallies from here, it might even look like a small head-and-shoulders bottom, with a neckline around $235. If it starts to slide back under $220, I would not want you to own it, even for a trade. This is strictly a trade, though. As we have discussed, there is a longer-term lower target under $200.

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In the meantime, for informational purposes, I want to point out the paper stocks have gotten quite a bid recently, though I have not heard anyone discuss it. Weyerhaeuser (WY) - Get Free Report is really a "wow," having managed to cross that downtrend line. It is at resistance now, but if it can manage a little sideways action and retest that line in coming days, the stock will get quite interesting over time.

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International Paper (IP) - Get Free Report is not nearly as remarkable, but it too has crossed a downtrend line. I think the resistance at $47 from the early April high will stall it out in the near term. But this too is an improving chart, as long as it stays over $46.50.

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Today's Indicator

The 30-day moving average of the advance/decline line is still in overbought territory.

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Q&A

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice.

Email Helene here.

When we looked at Intuitive Surgical (ISRG:Nasdaq) about a week or so ago, I noted that it was a sale into a rally. That rally took place exactly one day before the stock collapsed again. There is clearly a lot of support in this $360 area, but there is also that island top up above. I think ISRG ought to have some sort of bounce or consolidation in this support area. And then it ought to go down again. If it cannot get over $380, then the next time down it should break $360. It is difficult to determine a target right now, but the initial measured target is $350. If the break of $360 is severe, then the target would be significantly lower.

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In the near term, Facebook (FB:Nasdaq) has support at this $55 area and ought to attempt a bounce from here. Looking at the big picture, that is a head-and-shoulders top, and a break of that $54-ish neckline would measure to -- gulp! -- $35-ish.

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Starwood Hotels (HOT) looks to me like a top in the making. (How many stocks have we reviewed that look like tops?) I think HOT will bounce off this $71-$72 area, although it is likely to fail on such a bounce. For now, it appears that the $76-$78 area is where it would be a sale again.

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