Not Just Window Dressing

Moving trends in end-of-quarter performances shows the market is likely to tilt higher Friday

By Paul Cherney

There's been alot of talk about the end-of-the-quarter window dressing. I looked back at the last two trading days of the quarter since the March 2000 top. Here are the percentage moves on a closing basis for the S&P 500 and the NASDAQ:

There is a pattern in these end-of-the-quarter performances: The second to the last day of the quarter and the last day move have moved in opposite direcitons.

So, since we saw negative closes on Thursday, if the pattern holds, there should be gains on Friday.

The NASDAQ is within a layer of support which runs 1930-1770. The index has immediate (intraday) resistance in the 1825-1877 level, there is a focus of resistance 1839-1857. The next layer of resistance is 1865-1893. Immediate support for the NASDAQ is 1843-1794. If prices do move beneath 1794 and spend more than 3 or 4 minutes there without garnering buying interest then the market could falter to print near 1770. The 1815-1770 area represents good support but if 1770 fails, prints near 1715 cannot be ruled out.

The S&P 500 is within a band of resistance which runs 1136-1190. Immediate support for the S&P 500 is 1150-1136 then 1142-1117 which makes the 1142-1138 area a focus of support. Immediate (intraday) resistance is 1158-1182 within this zone is a focus of resistance 1166-1180.

* On Thursday (3/22/01) I had a signal trip which historically has very high odds (5 out of 5 since 1986) that the current advance in the S&P 500 will ultimately rollover and undercut the 1117.58 level on a closing basis. This signal usually sees the undercut within 6 weeks.

Paul Cherney is Market Analyst for Standard & Poors

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