For the last 3-4 months, the S&P 500 Index seems stuck in a trading range. Additionally, the trading volume during this time period continues to trend lower. Now that summer is officially over and and next week offers the first full week of trading since Labor Day in the U.S., more clarity may be forthcoming in the market's future direction. If the S&P can break through resistance at the 1,130 level a more sustainable rally might be at hand. The coming week may be more volatile due to Friday's quadruple option expiration day.
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| From The Blog of HORAN Capital Advisors |
The percentage of stocks trading above their 50 day average stands at 72% which is off the summer lows around 5%. Still, this percentage remains below those achieved at prior market highs when this percentage was over 90%. A lower percentage of stocks are trading above their 150 day moving average, 52%.
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| From The Blog of HORAN Capital Advisors |
For investors looking at broader market movements, watching the stochastics indicator in the first chart is a technical indicator that can provide some insight into the market's potential future direction. This indicator is best used to determine overbought/oversold levels. No one indicator provides a certain answer, but it is one indicator that investors might use in this trading range market.
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