Today's drop in stock prices produced sells in all of indicators suggesting the market has turned bearish. This market turn-around should last for a week or two with 775; then 750 on the S&P being the initial target price drops. We begin company quarterly earnings reports after the first couple weeks of April, which will determine market direction after that.
As mentioned before, another thing to look for is the mark-to-market announcement likely to be made between April 2 and April 9, more likely closer to April 9. If the annonucement is favorable to the banks, then this will be a game changer and the market could rally strong for a week or so to the point of exhaustion from its current extreme overbought state. A favorable MTM announcement could take the S&P to 900.
Once again, as tomorrow marks the end of the quarter, I expect the bulls to make a good showing and might rally. Both 30-min and 15-min Stochastics suggest the market should rise tomorrow. I expect the market to drop on Wednesday, April 1 when the new quarter begins. Therefore, for conservative investors, the best time to enter the market short might be right before the market closes tomorrow.
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