Friday, March 12, 2010

Midday Briefing for March 12th: Forming a Range

After an early morning sell-off, we've consolidated just below overnight lows, near the 3/10 highs that had been resistance. As a rule, markets spend more time making tops than bottoms. That generally leads me to look for rising markets turning into bracketing ones, not into falling ones. The action thus far today, which shows only 123 more advancing issues than decliners and a mixed NYSE TICK, is more consistent with a range trade than one trending to the downside. Currencies vs. USD have been relatively strong, but we're seeing weakness in the oil market. All told, this is a mixed picture and perhaps the start of a topping process that will extend into next week.