Where can the market pullback too. Short-term 800 looks to be providing a good amount of support and it's a round number, which makes people feel warm and special inside when the market stays above it. There is also support below 800 at the 50MA and around 730-750 and then November lows aka the "First Bottom". If the market climbs at the same rate it is, it should reach 850-870 by April 1st - April 3nd. 5-7 business days away. The market would be at some strong resistance levels and the bears will have to come out and short at these levels.
Once March closes, everyone gets a statement either IRA statement, brokerage statement or a 401k statement from their broker showing how awesome they did this quarter and changes a fee. So could you imagine if everyone saw their statement down another 50% this quarter. They would just start selling their accounts. So to prevent this why not have the market go up so people don't think they lost a bunch of their life savings.
So, after March the buying will start to dry up. The market will be at key resistance levels and the bears will be out.
The VIX closed beneath its 200MA today. Which could mean two things, first it could be bullish as support broke and the when the VIX moves down the market tends to advance upwards. On the flip-side, it could be very bearish that the market is getting complacent and there is no fear in the market. The indicators do point to more downward pressure.
There is support around 35. Which if the VIX drops at a rate of 1-2 points a day for 5-7, it will be around this support again by April 1st-April 3rd. The market will have just ripped up to 850-870 and fear will be no where to be seen. Seems like a great shorting opportunity.
But look what else will be happening between April 1st through April 3rd.
Here are some Key highlights:
March 31st- Consumer Confidence
April 1st- ADP Employment
ISM
April 2nd- Initial Jobless Claims
April 3rd-Unemployment Rate
Ben Speaks
If these numbers come in worse then people expect, then it proves that the economy is still in bad shape.(CRAZY I know because everything was fixed on Tuesday)
Top it off with a G-20 Meeting and you have the set up for some fireworks!
So to summarize, once the quarter is over and put into the books people will want to take profits. The bears will start the part off selling at 850-870. Then we have bad economic data, and more selling, then the bulls will stumble over each other to get out.
Of course this is all constructive thinking and the market does whatever it wants. So take this with a grain of salt.
On the $NYSI front. It keeps moving up, again to keep with the theme if it keeps moving up at the same pace in 5-7 days, it could be above the zero line and the RSI will be overbought. Good thing about this is if all goes to plan the $NYSI will roll over and cross the zero line, which would be very bearish.
