The market is mixed as we head to press. The Dow is up 40 points to 11,031 while the S&P 500 is up 6 and is at 1,190. The Nasdaq is off 5 points and is at 2,465.
Calling a market top (or bottom) is never an easy thing to do which is why we use “ranges” and support and resistance levels to give us an idea of where the market is headed.
These indicators, along with market sentiment and the trend, can give you a pretty good reading on where things may be headed over the short-term and sometimes they can give you a clear picture on where the market might be headed longer-term as well.
Many of you who have been following us for a few years know we have an uncanny ability to call market direction but sometimes finding trades to match the current market environment poses a more daunting task.
In our Weekly Wrap we always try to list these ranges or targets and on Sunday night we listed our Dow targets at 11,300-11,400. We were about the only option newsletter that said in February the Dow would hit 11,000 and when it did we added a little “fluff”.
That fluff was the extra 300 points and before Wednesday’s selloff, the Dow hit a high of 11,258 on Monday. We don’t know, yet, if that was a warning sign that we have peaked or if the market is just pausing before another leg up.
It could also mean we could get stuck in a trading range as we have listed downside support for the Dow at 10,800.
As far as the other indexes, we have a target of 1,250 for the S&P 500 and on Monday we hit 1,219. To the downside we are watching the 1,150 level.
For the Nasdaq, we outlined a top of 2,550-2,600 over the next few weeks and we reached 2,535. Folks, you can’t get much closer than that. To the downside, we have targeted 2,400 as support for the index but a break below that could lead to 2,250.
We were planning for the current rally to last through April and a little into May and the bulls could rebound this week and next. However, we are paying attention to our notes and preparing for all situations.
We wanted to release today’s update a little early because we have a NEW TRADE we are profiling and we wanted to give updates on our current trades.