In focus: Bored but bullish

By Lawrence G. McMillan

The stock market, whether measured by the Standard & Poor’s 500 Index or any other major index, has become downright boring.

After the upside breakout on the first trading day of 2012 (Jan. 3), the S&P 500 SPX was little changed for the next four trading days. Then, yesterday, there was an upside gap, followed by a very narrow trading range for the day and the same again today. Thus, the market has become boring. In the last few months, a couple of days of sideways action was an invitation to sell the market off – sometimes sharply. But that is no longer the case. Rather, the market seems to have returned to its long-term scenario in which the old adage is “don’t sell a dull market.”

There should be plenty of support below the market, although in the past few months, we have seen both support and resistance levels sliced through without much problem. The 200-day moving average is at 1,260, and there are technical support levels at both 1,250 and 1,270. The defining trend line now is the rising line that connects the October and November lows. That is currently at about 1,230 and advancing steadily every day. As long as SPX is above that line, the bullish trend is intact...

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