Market Takes a Step Back
After holding strong for much of the morning the market slowly gave in and drifted lower for the remainder of the day. The Nasdaq (2,438.49, down 44.82) and S&P 500 (1,392.57, down 25.69) both fell 1.8%. The Dow (12,814.35, down 206.48) lost 1.5% for the day but all three are failing to break through key resistance levels.
The S&P 500 will have to make a run past 1,425-1,450 and hold before we can seriously consider the April rally. The Nasdaq will need to test 2,600 and hold while the Dow will need to make a run at 13,500 or better to get me in the bulls camp.
The VIX (19.73, up 1.52) traded higher (remember the VIX increases as the market goes down) and tested 20 today. With first quarter earnings winding down, a weak dollar, and higher oil and food prices, I just don’t see any “good” catalysts to hang my hat on for an extended rally.
Although I could care less about market direction, I do like to follow the tug-of-war between the bulls and bears. However, some people follow market direction and tend to buy put options in a bear market and call options in a bull market. Knowing these things can help with your overall trading performance as you gain valuable knowledge on what signs the market is giving you.
Rick Rouse
Rick@OptionsMentoring.com
Tags: Add new tag, Dow, Nasdaq, resistance levels, S&P 500, stock market direction