Summary:

  • The US500 is little changed ahead of the final cash session of the week
  • The market is trading in a narrow range
  • Jackson Hole speakers could cause next move

The US500 is edging higher and making tentative gains ahead of what could be a defining moment. The Jackson Hole symposium will see both Yellen (3pm) and Draghi (8pm) deliver speeches this afternoon and the stock market is finely balanced heading into the talks.

After making an all time high earlier this month at 2488 the market has pulled back with two large daily drops. This sort of price action is likely concerning to longs and is not entirely consistent with a nice and smooth uptrend. However, even after these declines price remains above a rising trendline from the December low little more than 2% from a record peak and should we get a dovish message this afternoon we could see 2500 in the not too distant future.

link do file download link

 The US500 remains in an uptrend from last December. Despite recent weakness the market is just 2% from its record peak of 2488. Source: xStation

On shorter time frames the narrowing range since the all-tim high can be clearly seen The market has made a series of lower highs, first at 2473 and then at 2454. Bulls will want to see a move above at least 2454 before the can claim this sequence is broken. The lows of 2420 coincide with the rising trendline on a daily chart and are therefore of utmost importance. Closer to the market a rising trendline can be drawn from 2420 and when viewed in conjunction with the falling trendline from 2488 this means price is approaching the apex. A break out of this triangle could be the first sign as to which direction the next move will be, but its not until either 2454 or 2420 are pierced that further confirmation will be given.

link do file download link

The market has made a series of lower highs and together with a rising trendline from 2420 this is forming a triangle consolidation at present. Source: xStation

 With only 7 hours or so to go until the market closes for the weekend some traders may be forgiven for thinking that this breakout won’t occur before the close. However, with both Yellen and Draghi set to talk there is every chance that we get a decent move before the week is out.