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Stocks sing a new tune: 'Home on the Range'

With a mild Friday morning move, the S&P 500 is continuing to sing that old cowboy classic, "Home on the Range."

Over the past 70 sessions, the mega-cap index has remained within a mere 4.1 percent band, from 2,039.69 on the bottom (the March intraday low) to 2,125.92 on the top (the standing all-time intraday high set April 27). And while the market did manage to make a new closing high on Thursday, on an intraday basis, the range has held.

As stocks have gone mild, the S&P 500 volatility index (known as the VIX) has slid. This even though currency and bond markets have seen massive moves, and talk of an equity market bubble has become part of the mainstream market conversation.

"This is a market of contrasts," remarked Eddy Elfenbein, author of the "Crossing Wall Street" blog, in a Thursday missive. "New highs amid a flurry of pessimism. Growing nervousness, yet placid volatility."

With stocks becoming so quiescent, more attention is being paid to small upside and downside moves. The big question, of course, is whether stocks will exit the range to the upside or the downside.

"We perhaps witnessed the long-overdue conclusion of the multimonth consolidation pattern in the S&P 500 yesterday! I was really beginning to wonder if it would ever actually happen," exclaimed Raymond James' chief investment strategist, Jeff Saut, in a Friday morning note to clients. "As a result, today's session may just be the most important all year, and I want to see a strong follow-through to prove that this is the move we have been anxiously awaiting."

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For his part, Oppenheimer technician Ari Wald believes the recent action merely represents "a healthy pause" in the rally.

"Our view is that if you were to take bets on which way it breaks, and you look under the surface, you see that the odds favor the upside breakout," Wald told CNBC.

Because sentiment can be used as a contrary indicator, "it's actually improved sentiment as well, because the choppy behavior has gotten bulls more fearful, and as a result you've had more expectations of a correction," he added.


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