Trading Range

12/7/2018 10:15 AM

Dear Friends,

Trading Range

Note the chart below – the 1 year daily chart of the S&P 500 index of large US stocks:

  • The Trading range is shown within the blue box

  • The top of the range (resistance) is approx. 2790-2815

  • The bottom of the range (support) is approx. 2603-2631

  • This is a wide trading range – approx... 8% from top to bottom

  • There is no long-term trend that we can now identify

  • We will not know the trend until:

  • a market breakout through the top of the range or

  • a breakdown through the bottom of the range


Volatility as measured by the VIX Index, had been trending down since the spike in February 2018.

But, we had another spike up in October 2018.

I have marked the old and new trading channels for the VIX index in blue below.

What should you do?

I remain optimistic that market concerns will resolve themselves in time:

  • Mueller news

  • US-China trade “war” – why is everything a war?

  • Inverted Yield Curve – I will address this soon in another email

  • Fed Reserve Interest Rate hikes

  • Plunging oil prices

  • Etc., insert hyped latest news story

Call us with any concerns

Do not listen to the press – most often they do not know what the heck they are talking about

E.g.: I will debunk comments like this, which is totally false:

“Investors are also nervously watching a recession indicator in the bond market: the slope of the yield curve. The gap between the two-year and 10-year Treasury yield shrank this week to levels unseen since just before the Great Recession. An inversion -- where short-term rates are higher than long-term ones -- has been a reliable prognosticator of recessions in the past.” Matt Egan, CNN Business, December 7, 2018

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