The S&P 500 Index (SPX) is consolidating in a sideways range. As SPX consolidates, sentiment from the Twitter stream is painting a triangle. The break of the triangle will point the next direction in the market. If it breaks to the downside, we’ll probably need a small dip before the market can continue upward. A break to the upside should see SPX at 2600 pretty quickly.
Here’s the support and resistance levels tweeted by traders for SPX. 2600 is where they expect the next rally to pause. Traders aren’t expecting prices to dip below the 2535 level at the moment.
Breadth calculated between the most bullish and most bearish stocks on Twitter is falling a bit as the market consolidates. One concerning thing in this chart is that the bullish count stalled even as SPX ran from 2500 to 2550. Bulls want to see the bullish count rise with the market.
The market is consolidating in a sideways pattern. Sentiment is painting a triangle so all we have to do is watch which direction it breaks.