Yesterday

Whoever said markets are not predictable wasn’t paying attention to the price manipulation that often paints the tape around the end of each quarter.

Every professional in the market knows that largely unjustified rallies are something to expect at the end of the quarter, when stock funds set their ending asset values and bonuses are calculated. The market may be acting like a pig, but it somehow contrives to look a little better at the close.

That’s essentially what happened yesterday – pardon me while I crow a little – as we said it would in our start-of-week note. The Bulls came back for the end-of-month window dressing overnight Sunday and during the regular session Monday (Mar. 30).

Starting from the low Mar. 26, which was a second touch on the low of the month, the market has regained almost 50 points in just three trading days.

Yesterday the market moved up about 20 points in overnight trading, fell back a little for the open, then gapped up and stayed up for most of the day. It made a high of 2081.75, recovering most of last week’s decline, and closed at 2075.50, about 23 points above Friday’s close. That porker is looking prettier every day.

Today

This is the last day of trading for the quarter, the expiration for the monthly equity-index options, and the nominal deadline for a deal between the US, Europe, and Iran about nuclear research. There may be some volatility.

But when the battle is over, a close for the quarter not far from Monday’s close seems reasonable. A close at that level would be neutral between the Bulls and Bears for the monthly-option expiration, and it would set the stage for a move in either direction in April. We may see some back-and-forth during the day, however.

Today 2088.75-92.50 should be the ceiling for today’s trading, if 2062.50 holds up during the overnight session. 2052.75-56.50 should be the max floor for the ES if the price falls below 2060.50.

ESM5 Intraday Chart, Mar. 30, 2015. 60-minute bars

dampier.3.31.15.png

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