TraderMark has a great post up today at FundMyMutualFund about the S&P500 being stuck in a “box” for over three weeks.
“Roughly S&P 1260 on the bottom and upper 1290s on the top. Bears can claim that the market is working off an oversold state by churning, rather than rebounding. Bulls can claim the 200 day moving average is holding. So a little something for everyone. Usually the longer the market goes sideways, the more powerful the ensuing move. But there is little to get excited about right now until we break out one way or the other. Until that point selling/shorting at the top of the box, and buying/covering at the bottom has been the no brainer trade.”
This trade worked again today as the S&P500 rallied off the 1267 lows from Friday’s decline. He makes the point that the longer the sideways consolidation, the more powerful the ensuing move. I will be looking for a break of either support or resistance to signal the direction of the markets going forward.
Chasing Our Tail: 16th Day in this “Box” (FundMyMutualFund)