The S&P500 has been stuck in this range all year. At times, it has appeared to be on the brink of a breakout. Other times, it has felt as though a major breakdown was on the horizon. Neither one has occurred. Each attempt to break out of this range has led to a major reversal in the opposite direction (whipsaws are circled in the chart above).
CNBC – “Uncertainty has not gone away over the weekend,” said Ryan Detrick, senior technical analyst at Schaeffer’s Investment Research. “The markets are focusing on headline news again, and earnings have taken a backseat to what’s been going on.” Detrick said he expects the S&P to continue trading in the current range.
My opinion is that 1260-1345 will continue to be the key support & resistance levels until proven otherwise. Anything below or above that has turned out to be a whipsaw this year. Although this sideways trading range can be a little frustrating, there have been some great opportunities along the way in specific sectors and individual issues. Most recently, anything in the Precious Metals space has been on fire ($GDX, $GDXJ, $GLD, $SLV). For the overall market, this base building could be a blessing in disguise for the long run.
As the saying goes – The Bigger the Base – The Higher in Space!