A double bottom pattern is developing in the S&P 500.
While that's a bullish, dominant pattern in the index, its development is slow, indecisive and uncertain. That suggests it will run into strong resistance around the level of the double top pattern created in early 2018.
But rather than leading to a strong up trend breakout, the current reaction suggests the S&P index may become trapped in a long, slow sideways pattern with the market moving between 2,580 and 2,790.
That type of sideways pattern is good for traders as the market rallies and retreats within the confines of a broad trading band. It's not so good, however, for long-term investors because the market returns are limited by the strong resistance level. Investors look for a good breakout above the upper resistance level near 2,790.
The current behavioral relationships in the Guppy Multiple Moving Average indicator suggest that a strong breakout has a low probability of developing.
The short-term group of averages used to track the inferred behavior of traders has shown some compression and expansion activity. However, this is not particularly strong. There is no great trading conviction in the rallies, nor in the retreats.