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It has been almost three weeks since we last looked at the S&P 500.

Back then, the index was trading near 4135. It had been stuck at that level for nearly two weeks.

And, I warned traders to resist the urge to short a dull market.

The S&P 500 had broken out to the upside of a large consolidating triangle pattern. So, despite my intermediate- and longer-term bearish stance, it sure looked to me like the market wanted to press higher in the short term.

The market gods laughed. And they crushed the index 85 points lower over the next two days.

Then, just as I was reaching for a towel to wipe the egg off my face, the market turned around.

The S&P 500 regained everything it had lost and then some – in just two days.

The downside move was a bluff. The index was back above its breakout level. It looked ready to power higher.

That was nearly three weeks ago.

As of Wednesday’s close, the S&P 500 was still sitting right near 4135 – the same level it was at three weeks ago, and the same level it was at two weeks before then.

You could have fallen asleep five weeks ago, woken up this morning, and not missed anything.

So, let’s take another look at the chart and see if we can figure out where the market is most likely headed next…

As hard as it is for me to admit, this chart still looks short-term bullish to me.

The index is chopping around the support of its 9- and 20-day exponential moving averages.

It’s holding above the former resistance line of the consolidating triangle pattern. And, it looks ready to test the resistance of the April high near 4180. If it gets above that level, the August high near 4300 comes into play.

As I wrote earlier (and in late April), I still lean bearish on the intermediate- and longer-term direction of the broad stock market.

But it’s dangerous to short a dull market.

So for the short-term, as long as the S&P 500 holds above the 4050 level – which is the former resistance line of the wedge pattern – the path of least resistance looks higher.

Best regards and good trading,

Jeff Clark

What’s your latest trading strategy for this market?

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com.