Yesterday I wrote that I thought the market would take a pause from the gains we'd seen the past few days and that's pretty much what happened today. While I thought the Dow might end up a bit, it actually closed down just 31 points (though the Nasdaq did manage a small gain).
So that takes care of March. Tomorrow is April 1st and I'm looking for the advance to resume. According to The Stock Traders Alamanc, the Dow has been up 13 of the last 16 years on the first trading day in April. And April as a whole is actually historically the strongest month of the year for the Dow. And to top it all off, in pre-presidential election years, April gains are double, averaging 4.3%.
Technically, I see no reason why we can't go higher tomorrow. The Dow took a stab at the 12,390 resistance level twice in the last two days and was rejected both times. I've noticed that very often, the third time's the charm. The indicators are all still in broken mode, looking overbought but out of predictive power. Meanwhile the VIX put in a hammer type candle today. In fact it did that yesterday too. Normally, I'd take that as a sign the VIX is ready to go higher. However, the inability of the bears to cause a retreat when such signs seem to be in their favor indicates to me that fundamental economic forces are at work propping up prices. Like the Fed and the tape, I don't want to be fighting that.
Finally, all three futures (ES, NQ, and YM) are up in the overnight at 1:10 AM EDT by 0.15% to 0.25%. The ES remains in its rising regression trend channel. The only negative I can see is that the Dow edged sideways out of its own RTC today, normally a bearish setup. Whether this data point can trump the other signals remains to be seen, but my bets right now are for April 1st to go higher, and that's no fooling.
A bull market with bearish characteristics
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