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Looking for Answers

Well, let's start by looking at those poor statistics. Also, here's what I want to see with bonds, and Meta? I'll tell you what to do with META.

The Market

Was it really the crypto collapse that has roiled the stock market? Or was it just another excuse? And what about tomorrow’s consumer price index report, which seems to have fallen off the radar with the crypto nonsense?

Today was not a good day statistically. What began yesterday in terms of stocks making new highs and new lows continued today. The New York Stock Exchange Hi-Lo Indicator joined Nasdaq’s in turning lower. Today Nasdaq’s stocks at new lows increased. There are more new lows than there were last week, but not as many as there were in late September.

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Here’s the issue with comparing the environment now to late September: We are not oversold like we were then. Just look at the chart of the Overbought/Oversold Oscillator for Nasdaq. It only just now dipped under the zero-line. In late September it was grossly oversold, even more than it was in May and June. Now it’s more neutral than anything else.

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Take a look at a chart of Nasdaq using closing prices only. The mid-October low was right here. The low last week was right here. And here we are again. It is important for Nasdaq to hold this level. I will call it 10,200-ish.

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I do have some good news, though. The breadth was bad, but the McClellan Summation Index is still heading up. Now it requires a net differential of negative 1,500 advancers minus decliners to halt the rise. This is the first time since turning up that it has come within such a close range of halting the uptrend.

The equity put/call ratio on Tuesday was 1.3, which was the highest since March 2020, so bearishness is clearly back with us again.

I would love to see a positive reaction in bonds to tomorrow’s CPI release, because I continue to think bonds need a rally.

New Ideas

Energy finally got sold today. If $88 can’t hold on then I think the energy fund (XLE) - Get Free Report heads to around $84.

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Today’s Indicator

The Volume Indicator got to overbought territory earlier this week (54%). I suspect it has one more push up next week, but it is not oversold.

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Q&A/Reader’s Feedback

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.

We got the oversold rally in Meta (META) - Get Free Report and the question is do we sell it? Yes! The stock rallied more than 10%. Where do you buy it back? For a trade probably around $97-$98 on that gap fill. But remember my original point: This stock is ripe for tax-loss selling as we head into year end. Do not fall in love with stocks.

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Now that exchange-traded fund for gold (GLD) - Get Free Report has crossed the downtrend line, but is at resistance, what shall we do? We should hope for a pullback near that $155 area, which should make it buyable again.

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I’m not really sure what to do with Verizon (VZ) - Get Free Report, because it has had a nice rally but is right at resistance. If it can get through $38 it has layers of resistance all the way up. I would say have some patience here.

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