Ever since December 15th, the market has been grinding around in a range without any clear advantage to either side. This morning, it looks like the bulls have a real chance to run with the ball, as there is some follow-through from Friday’s huge rally, as prices begun to emerge from the top of the range.
You can see in this 4 hour graph how the /ES has been a nearly perfect sine wave, spending three weeks bobbing and weaving within the confines of this approximately 125 point range. A rally to about 4050 is within reason.
For longer-term bears like myself, the only good news is that there’s another sine wave pattern in the form of volatility, and it’s abundantly clear we’re near the bottom of that range. It may take a few days, but eventually the VIX will come to life again.
