Daily Commentary: March 28, 2024

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Market Should Move Higher

Posted by Pete Stolcers on March 28

The bid was tested and support was established. Now we should get a leg higher.

PRE-OPEN MARKET COMMENTS THURSDAY – This week the market tested the bid to see if buyers were still interested. The action was largely driven by programs and end-of-quarter rebalancing/window dressing. The market lacked a catalyst and we were heading into a holiday. This was the price action we expected so we kept our activity to a minimum.

Yesterday I urged you not to get “sucked into” shorting. Stay the course and maintain a buy the dip mentality. Those who gave into temptation were taught a costly lesson in the last 30 minutes of trading Wednesday. The S&P 500 shot 30 points higher and the volume was heavy. This is the sign of support we were looking for and I believe the market is going to move higher today.

When we return Monday, expect a “holiday hangover”. The action will be dull. From that point forward the bid should strengthen. The economic numbers will be solid and earnings season is only two weeks away.

I’m not expecting a run away rally, but we should see a nice move that we can ride for a few days. Then the market will pause (test the bid) and then we will get another leg higher. This is the pattern and you should time your trades accordingly.

1OP is spiking and we should wait to see if the the late gains from Wednesday retrace. I want to see $521.80 preserved and I don’t think we will even get close to it. That would be a sign that buyers are interested. Ideally, $522.40 does not get tested. That was the overnight low. Let some of the bearish 1OP cycle run and watch for stubborn price action if we do retrace. We want mixed overlapping candles. If the dip early is shallow, it will be a bullish sign.

As optimistic as my comments sound, don’t go overboard. This is the day before a holiday. Although I am expecting bullish price action, the volume will be light. It is also very likely that the action will die down in the afternoon as traders get an early start to the 3-day weekend.

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