The S&P has been trading in a range for the last couple of months, and ended the 3rd quarter close to the bottom of that range. The first trading day of the 4th quarter has been positive 80% of the time, which suggests a green day for Monday. What we really have to look in our trading is to focus on a break of the range to either side. If we see the price breaking above 1230, the trend should be long and conversely if the price action breaks below 1100, the trend would be bearish for more selling ahead. On the other hand, the market can remain trading withing a range for longer periods of time, as we saw from February through July. Until the new trend is defined, quick profit taking is a must.
