This is a market that is in semi-panic mode; it is money that is afraid it will miss a move to the upside or to the downside, committed only to momentum regardless of direction or duration. It is under the influence of schizophrenic algorithms and random impolitic commentary by members of the Federal Reserve Board. The best action for many traders right now may be inaction.
I’ve highlighted the support zone on the S&P 500 chart between 2125 and 2110, and the index has tested and retested that area. Currently, it is in the neutral zone which is situated above the support zone and below the 2175 resistance level. As we all know, doing nothing is a plan – while the market has time to calm down and participants mechanical or otherwise come to their senses. It will be more manageable after it decides if it is going to breakout or breakdown from the neutral zone. Remember that patience preserves capital.