Stocks are trading in a very tight range

Stocks are lower this Wednesday morning after another volatile session on the Chinese markets. However, stocks have already stopped falling and are moving back up, just as was the case on Monday and Tuesday towards the end of the first hour of trading. The market has been reversing itself a lot recently, and in fact, is doing so more and more frequently. Since mid-February, the S&P 500 has remained in a narrow band: no lower than 2,040 and no higher than 2,130. Since early July, the index has been tightening its range even further, hitting lower highs and higher lows – an incredible four in a row of each, in fact.

Perhaps traders have concluded that 2,090 is the perfect, eternal level for the S&P 500, but this seems unlikely. More likely, stocks are going to break out in one direction or another soon. Keep your eyes peeled, because whether what follows is a surge or a crash, it is likely to be a dramatic one.

In other news, global oil prices are still falling, but WTI held up better than most last night. WTI crude is now $42.21 per barrel.

At present, stocks are down. The S&P 500 is down 0.80%, the DJIA is down 0.91% and the NASDAQ is down 0.60%.

Here are your Wednesday morning market metrics. The industries showing strength today are Multiline Retail and Airlines. The industries showing weakness today are Leisure Products, Auto Components and Construction Materials.

The VIX is up 10.59% to 15.25 after closing yesterday at 13.79. The most active options this morning is SPDR S&P 500 ETF (SPY) with 12,711 August expiring $206 puts and 12,688 August expiring $205 puts changing hands. The total put-call volume ratio is 1.17 (420,366/357,930). NYSE Adv/Dec 476/2,311. NASDAQ Adv/Dec 509/1,746. 

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can follow Julian’s daily hedged options trades and his unfolding market commentary via twitter: @JulianClose_MIC.

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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