Today begins March OPEX and the triple witching close for the week. The markets are overbought and stalling here as the Russell 2000 and Nasdaq composite have made new rally highs with the S&P 500, Dow and NYSE still sitting short of that accomplishment. The Russell is about 4% above its January highs with the NYSE still 1% below January highs and 5% behind the Russell's move.
The secret lies in the Banks which woke up last week making an almost 4% gain on the week compared to the Russell and Naz Composite that were up about 1.7% for the week. The SPX and NYSE managed to squeak out a 1% gain with the Dow dragging with a .5% gain. Still all positive for the week.
So stall, crawl or fall? That is the question. My Stockfinder charts are not functioning correctly this weekend after a Stockfinder upgrade. I have seen them but when I go to manipulate them the app crashes so I could not get a copy to paste. Let me sum them up for you.
40 DMA % Index -
The curl happened on Friday and the NYSE and RUT put is lower counts. The Nasdaq did not confirm putting in still a higher Index value. Since they are all well above their 20 DMAs the curl puts the charts into neutral except for the Nasdaq which scored a +2 so slightly bullish here.
10 Day high minus low -
I had expected this chart based on Friday's price action to be the weakest of the charts. It actually made higher bars and put in pretty good numbers considering the price weakness. It scored an over all score of 0.
52 Week New Highs:
We lost the last of our bullish indicators on Friday when we failed to keep the momentum indicator on the NYSE bullish. The chart overall scores a 0. Each index made a higher new high bar of the day and to keep the neutral score the NYSE will need to lay down about 225 new highs in the first 30 minutes on Monday morning. That will be difficult if the morning gap down that is setting up holds.
The charts overall put in a dovish, neutral 0 from here. There was some improvement on the 10 day highs and new highs number but that was based on the gap opening on Friday. Today's weak opening should test the stamina of the bulls.
$SPX
Friday's price action was quite bullish. Despite the inability to close the deal above 1150, the overbought market managed to hold 1147. That line must hold today for the bulls and looks like it might be tested right on the opened. If 1147 is breached watch for a hold at 1145. Below that is 1140.50.
1150 is the place the bulls want to cross and have hold as support. That plan has not worked so far.
A strong response at the open would nail the direction. A break down will tell us this bull needs more running room to clear the hurdle. Continuing to trade sideways here between 1150 and 1140 will let us know that we are going to wear down the resistance before the crossing.
Remember it is OPEX week and we have no idea what strange hedges are in place and how they might be unwound this week. The markets move quickly and then pin for long periods as big movers are unwinding all week. I hate OPEX.
Right now I am neutral over the week. I would not be surprised at 1 to 3% pullback, a sideways slide or a 1% thrust day that gets us up on and over. The market has to show its hand before I can plan my next move.
Hope to see you in the markets - or in our trading room at http://ttthedge.acrobat.com/traders
marlin - aka RedlionTrader
