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Which Market Are You Looking At?

Half the people in this market haven't seen a correction in a year while the other half has been watching all their stocks go down. Let's see what's going on.

The Market

Half the people in the market think we haven’t seen a correction in a year. The other half is busy witnessing stocks that are down double-digit percentages and wondering what those other folks are talking about.

And that is the market we have.

It doesn’t matter that the big-five market cap stocks are drifting right now -- although Facebook (FB:Nasdaq) did bounce right off that $350 level we looked at the other day. So unless those stocks get sold the S&P 500 and Nasdaq continue on their merry way.

And, right now, the merry way is pretty much sideways chop for the last two weeks. The Russell 2000 is a bit different, because it has been sideways since February. The main question is when and how do we get out of this chop?

Well, a good whack to the downside is often what takes us out of it. But we haven’t had one of those in two weeks and honestly we had a big rally off that but the indicators didn’t change much. No one got terribly bullish on that rally. Breadth was pretty crummy on the rally (perhaps that’s why sentiment stayed so subdued). Even the Volatility Index has barely budged.

The number of stocks making new highs remains lethargic. The new lows are expanding, but even today Nasdaq’s didn’t expand beyond yesterday’s reading. Yet, the DSI for Nasdaq remains at 88 and now the VIX’s DSI is under 20, down to 17. Perhaps we are moving toward a higher level of volatility than we’ve seen in the last two weeks.

New Ideas

If you look at the chart of Nutrien (NTR) - Get Free Report, you can see what I’m talking about. It keeps threatening to break, and each time it gets here it rallies to a lower high. A break would be preferable, but instead we get chop.

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Is it any different for the Transports, which I thought would give us some help? It dribbles without really breaking. A break would get some attention, might even get some panic. Something.

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Today’s Indicator

The Volume Indicator lifted and that’s it. Now it sits in no-man’s land. No longer oversold, but not overbought.

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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.

I was asked if there is a measured target for Snap (SNAP) - Get Free Report and it would be near $90. I doubt it will get there easily, though. I always prefer when stocks fill the gap and that gap near $63 is really far away.

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I was asked for a follow up on Texas Instruments (TXN) - Get Free Report, which I recommended a few months back (in May). It hasn’t even bothered to breakout yet, so I am a bit dubious that it will do so in the immediate future, but if it does breakout the next target would be around $215.

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Whirlpool (WHR) - Get Free Report met its downside target from that small top when it traded to $210 recently. I would say the stock is trapped between those recent lows and around $230.

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