The trading range in the DOW continues to be 7900-9600.  We will move in this range until we get a catalyst to break us out.  I am slightly bullish bias through the end of the year.  Both the MACD and Stochastics are showing a “Bullish Divergence”  which could move us back to the top of the range.  Volatility remains high with the VIX at 66.  I just recently did an interview with Brian Overby Director of Education and Senior Options Analyst at Tradeking and he said that he feels that 50 is the new 30 in the VIX.  I personally feel that as clarity in the economy returns and when financial meltdown is removed from the equation, we will see the volatility return to historically normal levels.  We shall see.  For us, it really doesn’t matter because we make money either way.

The trading range on the SPX is 845-1000.  I am bullish bias within the established range.  More immediately,  I see us moving to the upside within the range.  We also have a “Bullish Divergence” revealed by the MACD and Stochastics.

We are at the bottom of the trading range and I expect a move back up to the top of the range.  Again, we have a “Bullish Divergence in the MACD and Stochastics that indicates a higher probability of an upside move.

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