S&P 500 Range Bound for a Month

The 20 day moving average we have been watching moved up from S&P 886 last week to 888 this week and this morning YET again, bounced precisely (I use exponential moving average over simple for those who ask). It is remarkable how consistent this has been since the 2nd week of March. Until it stops working, you keep playing the pattern. One time it will be wrong to play the pattern and people will get trapped long, but until then - it's been a winner.

While we have a lot of day to day movement and a lot of surges and drops in individual names, the indexes have essentially been locked in a box the past 4 weeks. We remain in this wide range of 930 on the top, and 875/880 on the bottom. Until we make a clean break one way or the other most of the action will be in individual stocks, and traders will continue to buy the bottom of the range and sell near the top.

For bulls, as long as we remain over key moving averages this consolidation period after a huge move is healthy.

For bears, the fact we are making lower highs (May 8th, May 20th, yesterday) could be a positive to their case,

But for now, we're trapped in the box.

Fundamentals? Economic news? Balderdash - squiggly lines are all that matters to this market.