Stocks Continue to Range

Stocks are continuing to range in their sideways corrective pattern. The S&P has been holding the range between 4380 and 4431 for over a week now. We rejected the upper bound yesterday, as we anticipated, which would have made for a nice mean reversion trade. Indeed, the S&P retraced the entire range, finding support at the lower bound. It is currently testing 4408, so watch for momentum at open to determine if we can test 4431 again. If so, the next target is 4462. If not, we should find support again at 4380, 4364, or 4350.