March Markets: Should You Go in Like a Lion?

Stan Harley  |

Bull Market Express Rocks On! 

Over the course of the last two years, the Dow Jones Industrials have traded within the pattern boundaries of an upward-sloping 1 X 1 channel. This latest move to new highs has seen the Dow push northbound to tag the upper pattern boundary of that 1 X 1 structure. Price is presently sandwiched in-between the upper 1 X 1 angle and the 18,125 price octave. With the prevailing winds from the south, the collective bullish forces are destined to push this market still higher. The subsequent price octave higher at 18,750 could prove to be more-formidable resistance – assuming the Dow can reach that level by the next trading cycle high I have identified for the March 11/12th time period.

The financial media have been touting the action in the NASDAQ Composite. This index has advanced from 1,250 all the way back to 5,000 – a level not seen since March 2000. 5,000 – both a major price octave and resistance level created by the former high – could induce a bout of selling by those investors hoping to get out “even.”  Indeed, I am focused on the time window surrounding the March 11/12, 2015 time period as the next likely trading cycle high point. Curiously, that will coincide with 15 years virtually to the day from the March 10, 2000 high in the NASDAQ. A couple months ago, I held the possibility that a March 2015 high might well mark the terminal point in this bull market; however, I now view any March high as a precursor to the final bull market peak – which my research is honing-in on for the May 11, 2015 time period. 

The S&P 500 index, too, has stair-stepped its way northward via a series of parallel 1 X 1 angular channels. In this latest rally surge, the S&P has advanced to the upper pattern boundary of that structure. The next major price octave at 2,125.00 is just a hair away and, while we have yet to reach that level, I suspect we will be there very shortly. On the S&P chart, I have drawn vertical lines at the trading cycle crests from the last eight months. The March 11/12th time period brings a panoply of time counts from each of those highs. As such, I am inclined to believe we could see the next flux of selling begin later next week that would – in effect – mark the “momentum high” in this bull market advance.


Market Internals

The NYSE Advance/Decline Line has again pushed to a new, all-time high. Historically, peaks in this indicator have preceded peaks in the overall market. Whether this phenomenon will continue throughout this market cycle remains to be seen but thus far it has confirmed the bull market advance.  

Below is my 10 day/30 day NYSE Advance/Decline Oscillator. With the 10-day component presently above the 30 component, the A/D Oscillator is not yet indicating “sell.” A rollover in this indicator later next week would validate the trading cycle high I am anticipating. A more serious divergence in this indicator would be expected in early-mid May – assuming, of course, we reach my tentatively targeted top at that time.

The New York Composite has broken-out to the upside from its “symmetrical triangle.” Following a retest of the breakout, the NYA is now stair-stepping higher. My regional target for this broad market index in the March 11/12th time period is the 11,250 price octave.

In the near-term, I have three areas of resistance for the major indices to keep close tabs on: 2,125 for the S&P 500, 5,000 for the NAZ Comp (already reached), and 11,250 for the New York Composite. We should see those levels resonate in the coming days. The combination of those resistance levels among the major averages will probably put the short-term brakes on this northbound march. Ultimately, those levels should be breached on the upside, though. But we may have to first undergo a period of consolidation into early April. For now, I would urge investors to stand pat on long positions and enjoy the march higher. May 11, 2015, though, is starting to look very interesting for a major peak…more on that in the following pages.

World Indices

The German DAX, the United Kingdom FTSE-100, and the Toronto TSX Composite are all at new, all-time highs. It’s a bull market, with confirmation among the major European and Canadian indices.

In contrast, the Paris CAC-40 and Sydney All Ordinaries remain well off their 2000/2007 highs. Indeed, I don’t expect we will see these two among the members of the new high club in the current cycle. 

The one index upon which I place the greatest importance from a divergence perspective is the British index. With no divergence (yet), the FTSE, like our Dow/S&P, is at all-time highs. But two months from now, I will be hawking the structure in the FTSE for potential divergences. In my experience, the FTSE usually supplies a divergence warning in advance of a major high or low on this side of the pond.   

Treasury Bonds

On the daily chart, the TLT Exchange Traded Fund (ETF) – a proxy for the 20 year bond (and by extension, the 30 year as well) has tagged the underside of its 50 day moving average and turned lower. 

Thirty-year US treasury bond prices would appear to have put in place an intermediate high. After surging above the 170 level, bond prices are now back below 160 and, as a minimum, are likely to – in the near-term – retest the 2012 highs just below 155. Although I remain a long-term bond bull into 2021, I am skeptical we will see a continued push to new highs without first undergoing at least several months of consolidative structure slightly lower in-and-around the 145 region.



Precious Metals

Metals prices remain in a multi-year bear market. After breaking below 1,250, Comex gold found recent support in the low 1100s and is now attempting a counter-trend rally back to test that threshold. The 1,250 price octave has served as both resistance and support over the last couple of years. The XAU found recent support at 75 and is struggling to make it back to the 100 level. I suspect 100 for this index may be a bit of a stretch – but even if reached is likely to prove to be formidable resistance for quite some time.




Each month, Stan Harley publishes The Harley Market Letter, a newsletter that provides advanced technical analysis of stocks, bonds, and precious metals. This is the abridged Harley Market Letter for March. Want to learn more from acclaimed market analyst Stan Harley? Visit his site and subscribe to the full Harley Market Letter.       

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:



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