Another pause

After last week's considerable gains, it's starting to look like we're running out of steam, at least in the short term, meaning the early part of the coming week. Today I bring you once again the daily VIX chart because it seems to have more predictive power at the moment than the Dow or S&P charts.

After six straight days of declines, the VIX has now traveled all the way from its upper Bollinger band to near the lower band. More importantly, on Friday it put in a very tall doji candle in the style of a hammer. Add to this the fact that all of the indicators are now in oversold territory and it looks like the VIX is poised to go higher tomorrow.

That would imply lower stock prices but I guess we'll just have to wait and see. The last few days of March are historically weak anyway and the futures are essentially flat right now. On top of that, on Friday the Dow closed at 12221, right at the top of the consolidation range from the beginning of March and that is now its resistance level. And finally, the Dow indicators are now all looking overbought.

So bottom line is that I'm not looking for much in the way of gains over the next couple of days and I would not be surprised to see tomorrow close lower.