After about three weeks of rangebound trade tricking traders and investors alike, it appears that the stock market has reached a short-term resolution. ðŪ
Below is an hourly chart of Dow Jones Industrial Average futures, which we’ll use to represent the U.S. stock market. We know, we know, the Dow is the boomer of the stock market indexes. But most of the major indexes look like this, and the Dow had the cleanest view. So work with us here.
As you can see in the chart, the index declined in mid-December before forming a trading range in which it’s been stuck for about three weeks…at least until today. Then, after several attempts to break higher, bulls finally pulled it off, with prices closing above the top of their range. ð
This matters because it provides some short-term direction for an otherwise directionless market. And technical analysts argue that prices resolving up instead of down is also significant since ranges that form after declines typically resolve lower (in the direction of the preceding trend). Â
Nevertheless, market bulls are hoping that the market’s resolution will last longer than the average New Year’s resolution. But all we can do is wait and see. ðĪ·