I am sounding like a broken record, yet so is the market.

We have reached a clear equlibrium point and soon price will break one way or the other out of the consolidation we are experiencing. Remember, the longer the consolidation, the larger the move, yet it is difficult to predict which direction price will eject when it is trapped in a range.

Gutsy traders can take a position now and place clear stops if wrong… or you can place a buy (or sell/short) stop to draw you into the market when this range breaks. Either way, my prediction is for a clean, clear break out of the recent indecision zone.

The “Mighty” Dow is still Trapped

The Nasdaq is also Trapped.

If you must take a position, go Long SPY (S&P) with a tight stop should it break below moving average support.

Sometimes, the best play is to wait for the market to tip its hand and then enter, but beware a “wash and rinse” which means the market may thrust initially in one direction, then shake back and take out the weak hands and stops, and then rally (or fall) hard in the original direction. Beware this, to those who keep stops too tight to the market.

Either way, be prepared and best of luck, regardless of your trading style.