Futures are hanging out around the 826 line - basically where the S&P closed yesterday and pretty much where it's been hanging out the past 3-4 days. At some point pretty soon things should jump one way or the other - futures aren't giving any clue whether today is the day....
Here's the close for the past 4 days:
Friday Aug 21 - 1025.13
Monday Aug 24 - 1025.56
Tuesday Aug 25 - 1028.00
Wed Aug 26 - 1028.12
The S&P formed another Doji day yesterday - that's 3 in a row - how's that for indecision? It's almost as if neither the bulls nor the bears want the ball. And it does wonders for any indicators such as MACD-H that measure momentum - because there isn't any! Here's a chart:
S&P 500 - Daily Chart - 3 Months
The S&P crossed over the 1000 line on Aug 3 - the first trading day in August - and in the month since then it's gained all of 26 points. Way to go bulls! The question is whether this pause in momentum (and don't forget there was another 10 day pause between 1000 and 1018 to start the month, before the dip down to 980 and then back up again - so pretty much more than 1/2 the trading days in August (there are generally 21 trading days in a month) have been a dead summer calm) after the big run-up for the past 5 months is just a consolidation before things move higher - or, as the indicators seem to want to indicate, and the general consensus by everybody that this market is extremely overbought (up over 40% without any meaningful pullback - what's that about?), and the fact that September is notorious as a bad month - is this statis basically the market turning over? Sometimes it happens on one short shock - sometimes it's a slow process like an ocean liner changing course. The CNBC folks have been wondering all morning why the market the past couple of days hasn't reacted in a better way to "good" economic reports the past couple of days. Dudes - everyone's at the beach. Maybe that's why.
Anyway, you can't argue with 3 dojis - neither the bulls or the bears are in control and things are drifting in a fairly tight range. They should pop - but when? Is it really going to take until after Labor Day?
Here's a clue in the intraday chart:
S&P 500 - 10 Minute Chart - 4 Days
See that fairly obvious triangle? That's been the price action the past 2 days - doesn't show in the dojis on the daily chart, does it? According to this, things should be getting ready to pop pretty soon, no? Which direction? Triangles are generally (but not always) continuation patterns - so since the market has been in an uptrend, the odds are that the pop will favor the bulls and pull things upward. Will it happen - or will the summer doldrums smother any movement for lack of interest and participation?
As was the case yesterday - look for a break past 1038 on the upside to favor the bulls - and anything below 1022 to favor the bears. Anything in between may set us up for another Doji. Lot's of people expect all hell to break loose one way or the other come September - this may be just the calm before the storm.
Good luck!