SPY May 28 2013

SPY May 28 2013

The market has carved out a channel sideways. That's helpful for trading, because it helps us to form order out of chaos. The range 1635-1670 is in play, and could be for some time. Eventually, we break out, most likely in June.

Below, a follow-up to my 4-hour chart of the futures. Two things I wish to point out about this chart: 1) the futures did cross the 20-period line as predicted on Friday, and that crossover was a prime buy point; 2) The Fibonacci lines that I left up from the Bernanke spike last week had great utility in understanding subsequent market moves.

The great thing about this market is that, despite its relentless upward bias, its wild swings give great hope to Bull and Bear alike. Dropping from 1670 to 1654 intraday today just seemed to confirm every Bear's inner certainty that this market, like Hitler's view of the USSR in 1941, was a creaky old shack just waiting to have its door kicked in so it would collapse to the ground. It's easy to believe that sort of thing - if you willingly assume away the fact that the futures rose relentlessly from 1635 to 1670 in the first place. That's the kind of thing you have to ignore when you attack Russia - I mean, when you blindly short this market.

S&P Futures May 28 2013 Four-hour chart