The S&P500 finally broke though resistance two weeks ago, after multiple previous attempts led to sharp failure.
Each previous meeting with resistance had a sharp resolution. Movement in one direction. It was decisive.
The break above this resistance has triggered just the opposite. Indecision. It's been a frustrating two + weeks of sideways chop.
The intra-day action mirrors those daily candles. Failed breakouts and breakdowns. Intra-day spikes and swoons. And frequently at the end of the day the price action ends up right near the previous days close,
Its a veritable chop fest.
Are we seeing consolidation from the sharp rally to start 2019? Is this indecision from the continued flow of negative headlines? More importantly.... when is this market going to breakout... or breakdown?
Could this sideways chopfest last the rest of the year?
Anything is possible, but a sideways market for the rest of the year would be about as likely as the NY Mets going through the entire season without losing someone to injury.
I still think this market is going to head to record highs later this year and like the rally since 2016, it will be small caps leading the way.
$IWM is putting in a wonderful inverse head and shoulders pattern.
$IWM also has moved back into the 2016 post election channel and rests above support.... by a hair.
I think the resolution to this chop is coming in the next few days. A break lower would set $IWM up for a very tradeable move to ~$144 support, which would also portend overall weakness for the market. However from there I think a furious rally to fresh record highs would begin.
A move away from this current zone would be welcome, be it down or up. This area is clearly the chop zone.