Major U.S. stock indexes have been range-bound for about two months since their March high (Chart 1). There has been strong support at the bottom of the range to produce the April double bottom as well as strong resistance at the top of the range to suffocate a new marginal high in the Dow this week.
As market sentiment swings accordingly at each end of this price range, the key question of whether the market is in a sideways fourth wave consolidation or a topping process (e.g. the 2011 top) remains to be answered (Chart 2).
Ironically, the assessment discussed since the March high has not changed. Odds likely favor a consolidation as long as the breakout above the long term resistance zone (see Chart 1) does not fail.
For the near term, we have some well-defined wave structure in the SP500 Emini since the April low (Chart 3).