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Word of the Day: Awful

That describes breadth, net volume and new lows. Is this any way to start a rally?

The Market

You just know I’m going to complain, so let me get the complaints out of the way: Breadth was awful.

In fact, it was worse than awful, because net breadth on the New York Stock Exchange couldn’t even manage positive 400 issues. Nasdaq breadth was flat.

But maybe net volume was better? No. It was flat on the NYSE. Nasdaq was better at positive 840 million shares, but Monday it lost 830 million shares and so Tuesday it gained back what it lost, while the Nasdaq Composite is up 170 points in those two days.

Monday I praised the new lows, because there were fewer than the prior peak for Nasdaq, but now I can’t praise them, because there were more new lows than new highs for Nasdaq.

Again, these are not the way you want a rally to start.

But can it continue? My guess is it can, but it is likely to be quite choppy at best. Just look at the sentiment shift. We went from last week’s "don’t own tech" to this week’s "own tech." Basically, the selling dried up -- fewer new lows on the decline Monday -- in tech, and I’m not sure if it was buying or shorts covering that helped the index movers back up. The statistics say the buying was narrow.

I am going to finish by noting that the Dollar Index is now at that all important 94 level. I think it is incredibly well-watched. I have been bullish on the buck, since early to mid-August when sentiment first got so bearish on it. I think it gets over 94 at some point. But keep your eyes on this level.

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New Ideas

I want to revisit the chart of Pfizer (PFE) - Get Free Report, because I highlighted it a week or so ago, thinking this mid-$30s price was a decent one. It has come back to retest it. I think it needs time, but I think the downside risk is that gap fill around $33.50.

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Today’s Indicator

The McClellan Summation Index is still heading down.

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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 struggle with charts like Plug Power (PLUG:Nasdaq), because there is no base to speak of and there is a potential top, because it hasn’t made a new high in at least a month. If you want to own it, then there are two levels to focus on. First a break of the uptrend line at $12 would be a yellow flag. Breaking $11 and you’d look for a gap fill around $9 in a hurry.

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Johnson and Johnson (JNJ) - Get Free Report is a big disappointment for me. I thought it would break out when it had finally gone up and over $150, but it failed. Now I fret that that low in the $136-$137 area is in play, especially if $142 breaks.

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I would sell Slack Technologies (WORK) - Get Free Report on a rally in the $28-$29 area.

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Citigroup (C) - Get Free Report looks poised to fill that gap, but it is getting grossly oversold so I’d be shocked if there was no rally attempt in the next week but that’s all I see right now.

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