The major indices have spent most of August in some form of light consolidation. For the S&P 500, after putting in another all time high on the 8th, the market took a relative dive down into the 2420s. Since then, the market has been bouncing back, particularly within the past few days, and looks set to move higher within the range it has traded in since early March.
There are plenty of support and resistance levels evident on both the 30 minute and daily charts of the S&P. What is evident is how tight the market’s range has become. While maintaining a distinctly upward bias, the swings have consistently stayed within a 2% range.
With the end of summer fast approaching, we are staring a the last chance for the bears to make any kind of a significant showing prior to the beginning of the seasonal strong period. Keeping an eye on the rising levels and moving averages for breakpoints that may signal the onset of a significant correction will be of heightened importance over the next four to six weeks.