Something has got to give

March 30, 2006 · Print This Article

The market surged higher this morning only to fall back hard. The strong overhead resistance I menioned yesterday was breached, but only for a brief moment. The bears decided enough was enough and around 10:15 proceeded to push the market lower. The Nasdaq was able to move fractionally higher on the day and this pushed the Nasdaq 100 into overbought territory. The recent divergence in the major market indexes could be a short-term signal for all of the bears out there. Longs, be careful. Keep a close eye on the 1305 level in the S&P. As I stated yesterday, I thought the S&P would move today and Friday. Well, so far, I am correct. Who knows how long that will last. Our proprietary straegy signaled a sell on the 29th and so far it has worked out. If all goes well and my thoughts are correct our strategy could see another profitable trade. I have to say I am more confident than usual in my prediction tomorrow, because the last day of March is historically a bearish day for the market. Of course there are other reasons as well, but having seasonality on my side is always reassuring.