Hunt-orbe-Hunted

Market Recap on the price consolidation

AMEX:SPY   SPDR S&P 500 ETF TRUST
Markets closed flat as investors debate tariff deadline and as the Federal Reserve is going to deliver its month to month monetary approach tomorrow. However, on the other trade front, House Democrats declared a concurrence with President Trump on an arrangement between the U.S. and Mexico, Canada.

The sectors faltered and closed mix with XLV AMEX:XLV along with AMEX:XLE and AMEX:XLK post a gain of 0.22%, 0.20%, and 0.08% respectively while AMEX:XLP , AMEX:XLY , AMEX:XLI down 0.32%, 0.17%, 0.12% respectively.

( S&P 500: 3132.52 -0.11% DOW: 27881.72 -0.10% NASDAQ: -0.07%)

As the S&P 500 stepped into the 3150 and 3100 levels, we are getting a range contraction compared to the previous two months trading session.


If you see this on the hourly chart that's where the story begins. During the volatility spikes recently we've seen many rapid price movements and even more overnight gaps took place in a tight range. But these VIX pops didn't do much for the market, the market just simply remained massively unchanged with day to day basis. As we push toward the holidays and the end of the year, this development in the range should where the traders pay attention to.

Tomorrow we have a thing called the Federal Reserve taking a policy announcement. If you cross-check the quotes from the CME group on what are the rate probabilities of a rate cut or keeping the rate the same. There is a 97.8% possibility they will lower or at least keep the interest rate at the same, and the other is a 2.2% chance they will raise the interest rate. Since the quotes implying Fed is not looking for a change in the interest rate, so we are more interested in the announcement that respects to the future of the economy, we had good jobs report on last Friday so that's maybe will play into some of their comments, and the other thing is the repo market which is the root cause that's taking place within our current market environment.

Beyond that, the current volume continues to decline. So we may see a price consolidation or a range contraction to be continued in the next couple of weeks in December. Traders should be cautious about this 3150-3100 levels, a defensive preparation would be a plus if the market potentially cracks above or below the range.
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