A few weeks ago I called for the S&P 500 to go sideways in the 2000-2100 range for several weeks. That’s what we are getting, but how much longer can it continue? Not very long I think. Let’s have a look at the chart (click image to enlarge it):
The S&P is back within a narrow range, just like it did in the first half of the year. The Earl (blue line) and MoM indicators are close to neutral and pointing down. The slower Earl2 (orange) keeps coming down from the major high it reached in early November and is now close to neutral as well. It is possible that the market is turning up already, but one or two more weeks of correction would make for a more attractive setup. So, I would still wait until the Earl2 drops below zero and forms a bottom. We stay in a lunar green period, which tends to favor a rising market, but the technical outlook still points the other way. So more sideways action remains my base scenario.