9:00am (EST)

“Although this week is historically bearish, we could see some “window-dressing” by the fund managers which means they will be buying stocks early in the week.  We still feel the market is close to peaking but we wouldn’t be surprised to see one last run at our near-term targets (Dow 13,500; S&P 1,425-1,450; Nasdaq 3,250; Russell 850) if there is a rush to buy this week.

We could also see a trading range this week before we get the surge in April which is typically one of the best months of the year for the market.  Over the past decade, the indexes have gained 2%, on average, in April and if support holds this week, there is a good chance history repeats itself.  However, we aren’t too bullish on 1Q earnings which will start to come in during the second week of April.” (3/25 Weekly Wrap and Monday morning outlook)

So far the market is following our road map for the week following Monday’s big surge.  There was a little follow through on Tuesday as some of the large-cap stocks like International Business Machines (IBM, $207.18, down $0.59), Home Depot (HD, $50.04, down $0.09), Walt Disney (DIS, $44.15, down $0.23) hit new 52-week highs before pulling back as the follow through rally fizzled late in the day.

The Dow gained 44 points, or 0.3%, to close at 13,197.  The blue-chips traded to a high of 13,265 but closed below the 13,200 level which is becoming the new favorite playground for the bulls and bears this week.  Dow component, Pfizer (PFE, $22.50, up $0.34) managed to hit a new 52-week high of $22.80 but it wasn’t enough to keep the index out of the red.   

The S&P 500 slipped 4 points, or 0.3%, to end at 1,412.  The index traded to a high of 1,419 at the open, its loftiest level since May 2008, and fell just short of kissing our near-term target of 1,425.

The Nasdaq dipped 2 points, or 0.1% to settle at 3,120.  Tech traded to a high of 3,134 late in the day but went out near its low by the closing bell.  Apple (AAPL, $614.48, up $7.50) tried to keep the index in the green and did its part after setting a fresh all-time high of $616- and change.  The Apple March 610 calls (AAPL120330C00610000, $7.75, up $2.65) opened at $4.65 before adding 50% for the day.  It’s been years since we have played options on Apple but now that the stock trades WEEKLY options, we have found a cheaper way to play the stock. 

Futures are favoring the bears this morning as we head to press and look like this:  Dow (+35); S&P 500 (+4); Nasdaq (+8).  Subscribers, check the Members Area for the updates as we have moved a couple of Hard Stops up to protect profits.