The Market Trend Model (data sheet) moved to a more mixed bias by the end of the week as the market indexes moved higher and back toward the top of their respective trading ranges. The narrow and protracted trading range continues to confound both bulls and bears as neither side seems able to manifest a strong and sustained trend from one week until the next.
The Nasdaq (chart), the Nasdaq-100 (chart), and the S&P 500 (chart) continue to hover near all time highs. Despite what feels like a heavy and slow moving market, these indexes closed above their respective 10-week moving averages on Friday with above average weekly volume. The Russell 2000 (chart) continues to underperform, although this index appears to have found support at its 40-week moving average.
According to Arthur Hill (@ArthurHill) at StockCharts.com (link), the S&P 500 is currently experiencing its narrowist volatility contraction in over 20 years. Hill notes that volatility contraction is often followed by volatility expansion (article). The message here is that a strong and sustained trend in one direction or another is on the horizon ~ wait for it, wait for it, and wait some more.
As I stated earlier this week, "at the moment the stock market appears to be in a holding pattern as both buyers and sellers wait for some type of catalyst to push the indexes one way or another. Whether the catalyst is Federal Reserve interest rate policy, company earnings, or some other as yet unknown remains to be seen."
As usual, remain mindful that anything can happen from one day to the next.