Sideways has been the story for a while now after that monster rally that started from the #2 green arrow in area 2. Notice price never actually entered area 2. If you look at the chart of SPY (same day) it looks like a failed breakdown, and they say "from failed moves comes fast moves".
The SPY looks like HigherHighs and LowerLows are in store for a while, but I'll use the QQQ chart to show where I think we are headed.
Overall, I think we are headed to area 4 - we may bounce or we may crash thru - so the options are to go long at the top of area 4 or short at the bottom (essentially a breakout) for a shorter term profit. If we beak area 4, look for a re-trace back to it, then short. Once we find ourselves down at area 3 I'm all long right there.
So - in the near term, I'm looking for a bounce at area 4 back up to about 55.50, then down to area 2. If we take off from area 4 we might have enough steam to punch thru area 3 as this area has been softened already.
