George posted a couple of chart’s recently showing the market’s sideways trading range. And I think a rectangle pattern is the correct interpretation of the trading over the last three weeks. Here is an hourly SPX chart (click to enlarge):
The blue box gives the height of the rectangle. A breakout or breakdown should move the same number of points. So, the green line shows the bullish resolution up in the 1140 area, and the red line shows the bearish resolution down around 1057.
The purple box shows the November 9th gap. In the event of a move down, that gap would likely provide support, even if only temporary.
Since the futures have already probed down to 1067, I’m expecting a bearish resolution. Further support for that expectation is that the IWM is now well below its November 9th gap.
Bulls can pin their hopes upon the fact that the QQQQ bounced off the top of its November 9th gap on Friday morning.