Another pause in the works

Yesterday I called for higher today and spoke of resistance at the 12,390 Dow level.  And that's just what we got.  After topping off at 12,383, the Dow pulled back a bit to close at 12,351.  The good news is that we handily cleared the 12,250 congestion level from earlier this month.  The bad news is that we're right back to the high reached on February 17th at which point the Dow's virtually continuous three month advance stalled.  However, we're not looking quite as overbought this time as back in February.  The indicators are of course all maxed out in overbought mode, but we've only been in that area for four days now, compared to nine the last time around.

Still, this level may be hard to breach.  It represents resistance going all the way back to early 2008, when the market was still in the early phases of its retreat from the all-time highs set in October 2007.  And historically the last day of March is not a good one for the Dow.

Turning to the VIX we see that although it was down today it has not yet reached its support level in the 16.50 neighborhood, implying that it has at least the potential to go lower still.  However, with the size of the gains from the last two days, I think the market may take another breather tomorrow, possibly registering a small gain.  I'm not looking for any major moves either up or down.  But I do think the advance will resume Friday, the first trading day of April.  In the meantime, the green swing trend arrow remains firmly in place.