Narrow Ranges Suggest Caution
03/31/2010 9:03 am EST
Many of the major averages traded in tight ranges Monday with many forming dojis on the daily charts, suggesting a potential shift in control from the bulls to the bears. Typically, a break below Tuesday’s lows should signal more selling. The NASDAQ’s McClellan Oscillator last week (see arrow) looked as though it was ready to rally back to the highs. The rally failed, however, and the divergence (dashed lines) is consistent with a correction. First targets at 2300-2325 (3.5%-4.5% lower).