![\"\"](\"http:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/Screen_Shot_2017-05-31_at_12.00.34.png\")
<\/p>\n\tIt’s going to be a long, boring summer if the S&P doesn’t move more than seven points. For three straight days, the index has been stuck in the same seven-point trading range.<\/p>\n
\tIt’s remarkable to think that a market with millions of participants and trillions of dollars at work can be motionless for more than a few hours – let alone a few days.<\/p>\n
\tThe one thing that traders should remember during this time is that periods of low volatility are ALWAYS followed by periods of high volatility, and vice versa.<\/p>\n
\tDon’t let your guard down.<\/p>\n
\tWith that in mind, here’s what to look for in the action today…<\/p>\n
\tFor today, let’s take a look at the 15-minute chart of the S&P 500. The 15-minute chart is a short-term chart that displays the market action in 15-minute intervals, as opposed to the standard daily chart, which shows one-day intervals.<\/p>\n
\tWhen there’s not much action to look at on the daily chart, sometimes it’s useful to look at a shorter-term time frame to get an idea of what’s going on.<\/p>\n
\tHere’s the 15-minute chart of the S&P 500…<\/p>\n
\t<\/p>\n
\tThe blue circles on the chart show the three periods this month the S&P 500 was stuck in a tight trading range for a few days. This choppy, consolidating, back-and-forth action is one way the market builds up energy for its next move.<\/p>\n
\tNotice how during each of these periods, the MACD momentum indicator reached overbought levels and then gradually cycled back to neutral. That’s like the stock market recharging its battery. Once the MACD cycles back to neutral, the market is ready to make another move.<\/p>\n
\tOn May 17, the move was to the downside. On May 25, the move was higher.<\/p>\n
\tNow the MACD has cycled back to neutral again. The market is ready to make its next move.<\/p>\n
\tWe could go either way here. But, my guess… and it’s only a guess… is the next move will be to the downside.<\/p>\n
\tOn Friday<\/a>, I wrote about how Volatility Index (VIX) option prices were skewed in favor of a higher VIX over the next three weeks. That’s the same sort of condition we had going into the big drop on May 17. So, with that backdrop, I’m going to give the bears a slight edge over the next few days.<\/p>\n \tHowever, price action remains bullish. The S&P is still trading above its 9-day exponential moving average (EMA) at 2402. High-yield bonds and the semiconductor sector – the two assets I told you to watch yesterday<\/a> – are holding up.<\/p>\n \tThat’s why the bears only get a slight edge. And traders should only hold small exposure to the short side.<\/p>\n \tI’ll update Delta Report<\/em> readers on these trends throughout the day on Jeff Clark Direct<\/a><\/em>.<\/p>\n \tBest regards and good trading,<\/p>\n \t \tJeff Clark<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
<\/p>\n \tMailbag<\/h2>\n