S&P Projection – Flat

There’s often talk of whether the market will be heading up or down. Don’t forget sideways! My differentiated call is that the market may be in a period best characterized as range bound. The 1300 level may serve as the bottom end of the range; I’m not sure about the upper end yet, but we may be close. Here is what it would look like:

SPX is right at an RSI level of 70. The difference between a trending and non-trending market can be observed in RSI. If my thesis of a range bound market is correct, the 70 level should not be definitively surpassed.

The VIX (weekly bars) is now poking into the “old normal” levels last seen in 2007. The market may be getting duller.

Finally, below is a chart of the last eight months in which I have plotted the S&P 500 against Copper adjusted for the US Dollar’s valuation. The latter has been very weak, recently penetrating below its 200 day moving average! This divergence suggests that equities’ strength may falter.