Price Compression Continues

Market Outlook – Traders remain caught in a compression zone that is going to expand by the end of the month. OR at least this is my estimation. Today, the heat of the news cycle opens up. The trading ranges remain the same. The pervasive bid is still present below but as prices hold from below but do not break free above, the trajectory downward becomes more likely. The breach of 4213 remains the line in the sand that sellers continue to defend.

TRADERS WILL GET THE MOST BANG FOR THE BUCK WATCHING THE LOWER AND UPPER EDGES OF THE RANGES TO TRADE WITHIN THE BAND (SHOWN BELOW IN MY METASTOCK PROGRAM).

When you see these charts look for congestion highs and congestion lows within the range of what you want to trade, then set an alert at those levels. When the levels trigger, we can drill down to tighter time frames and watch for the failure of the congestion line or the breakout/breakdown. Then take the trade in the direction of the confirmation. Always the same technique. Wash, rinse, repeat.

The debt ceiling talks will drag out – but no-one wants the blame so not sure how things play out. Speaker of the House has his seat on the line, so there seems to be little room for him to compromise. I remember a time when all the government offices that were non-essential shut down and the employees were furloughed. FYI, they get their back pay when the dust settles.

Since it’s cool to be entrenched and non-compliant between the parties that run our country (everyone wants to flex and be the tough guy instead of putting ego aside and coming to the table- they have forgotten that they work for us) we might just have one of these around the corner, and that will likely hold the market from further breaks to the north.

But truly anything can happen.

Here’s a look at the levels for SPY if you are interested