Folks, my work suggests that internal market lows were developing between 3/13 and 3/18, when maximum new lows, volumes, the VIX index and the TRIN, or Short-Term Trading Index, all peaked simultaneously, followed by price lows on 3/23.

The S&P 500 closed above key resistance of its 200-week simple moving average (sma), 2648, for the fourth time this week with strong upside vs. downside volumes each day. Next resistance levels begin at the 50% retracement of the 1Q decline at 2792, followed by heavier resistance at 2939, which coincides with the 62% retracement level declining and the 50-day moving average (dma) at 2908, just below the now declining 200-dma, 3015.

I believe the key point heading into next week is that short term indicators, which were deeply oversold on 3/23 and bottoming, are likely to be overbought and peak JUST as another option expiration takes hold. Secondly, the S&P is now moving into its next major resistance band between the 50% -62% retracement levels (2792-2934) and the widely followed declining 50-dma at 2908.

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Finally, but not unimportant, the first quarter earnings reporting season begins with the banks. The bottom line is a pullback is likely to develop next week with support levels at the 200-week...

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