Will the 2014 stock market enter a trading range?
I hope that this blog about monthly price action will help traders learn how to trade the stock market a little better. The monthly chart has had a series of buy climaxes over the past 5 years and now is at the top of channels on the weekly and daily charts. Two thirds of the time, a bull breakout above a bull channel fails and the market then tests the bottom of the channel, which is the bull trend line below. The most obvious trend line is now around 1630.
The market is almost at a measured move from the failed wedge top of September 2012.
Even though it is still in a strong bull trend on the monthly chart, it is also probably in the early stages of a trading range that will likely last about TBTL (ten bars, two legs), which is about a year on the monthly chart. Like the prior ranges, this one will probably be about 10% from top to bottom, which is about 150 – 200 points.
