S&P 500: The Range Won’t Last Forever, It Just Feels Like It
- FOMC does nothing to break the S&P 500 free from its range
- Support and resistance boundaries remain the same, waiting for a break
- Traders need to stay alert despite 'boring' market conditions
The title of yesterday’s commentary: “S&P 500: Looking to the FOMC to Spring It Free”. Well, we're still waiting…It was a rather uneventful reaction to the outcome of the Fed, with only a range of approximately 15 handles and a closing price about 2 handles higher than where the S&P was prior to the release of the decision and policy statement.
Traders are struggling to find opportunity in the sideways chop we call the stock market. The Nasdaq 100 has moved up a bit since the S&P started the horizontal waltz and the Dow has moved down just a shade. Patience is required...
We have discussed reasons why the market looks more likely than not to break to the down-side (complacency, breadth & market tendency), but until price action breaks out in either direction none of the indicators or studies we look at matter at this time.
Support continues to remain in the 2155/60 area, while resistance in the 2174/78 zone. A sustained break of either side will be required to grab our attention. Traders looking to play the range can continue to do so as long as these boundaries hold, but the situation is growing long in the tooth and a break is growing closer.
What will break the market from its range? Anyone’s guess. Tonight at midnight GMT time we have the BoJ in store; the general consensus is the central bank will make a move, but to what extent is the big question mark. Depending on this outcome, markets could be making moves heading into tomorrow. Perhaps this will be a kick start for a directional move out the S&P, perhaps not. In any event, we should be on our toes as this range won’t last forever even if it feels like it will.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
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