Friday marks the one-year anniversary of the S&P 500's all-time high. And yet since then, the market has been just a few percentage points away almost the whole time. How depressing is that? This range-bound market has tested the patience and fortitude of many traders as they try to find an edge in a painfully boring tape. While we’ve seen some swings in both directions, stocks have largely been unable to show any strength after the weight of the evidence back in July turned bearish.
While there’s several pieces of data you could point to that show hints of brighter days ahead, when you look at just a basic chart of the major indices, it’s tough to get very excited. The S&P 500 has created a clear level of resistance at 2110. The Dow Jones Industrial Average has put in a false break out from its prior high as price has come back into its year-long range. The Russell 2000, for its part, is in a down trend of lower highs and lower lows – as is the international index (NYSE:MSCI EAFE).
Eventually we’ll see a breakout. It could be to the upside or to the down. But at this point, it looks like the bears will retain control. That said, as a price-focused trader I’m prepared for either conclusion. Patience has never been more of a virtue than the last twelve months in the equity markets.