Dec 4 S&P Update: The Coil Everyone Is Misreading
A tightening market that feels active but hasn’t proven anything.
The market keeps grinding higher, but the underlying structure hasn’t changed.
This entire move has been slow, controlled and emotionless.
Every rally looks like it is trying to break out, but every breakout attempt immediately dies.
Every dip looks like it wants to break down, but nothing gains momentum.
The whole thing is tightening, not trending.
We started the week with a clean wedge. A pattern that usually resolves quickly. Instead it shifted into an ascending triangle.
Normally this favors buyers, but the behavior tells a different story (so far).
Each attempt into resistance rejects instantly. No power behind it.
This is where high reward to risk traders get tested.
The tape looks alive, but nothing underneath has actually triggered. No expansion. No emotion. No structural change.
This is the exact type of environment where traders start manufacturing trades because the tape looks busy.
It isn’t.
It is coiling.
Look at the Daily first.
Price is pressing back into the same resistance band that marked the October peak.
The last time we had this compression behavior, price kept tagging higher highs while RSI rolled over and printed lower highs.
Classic divergence.
The result was that vertical red bar.
Now we’re back in that same behavior.
But the character is different.
RSI can’t get above 60… just grinding under. Buyers are pushing into resistance without the kind of momentum that drove the last impulse.
That matters.
When you know what happened last time behavior compressed, you can’t pretend this is some clean breakout setup.
Now add volume to it.
Volume is fading into this push. Not a blow-off. Not panic buying….
It’s just thinner participation as we walk back into prior trouble.
That is not what you want if you are a high reward to risk long.
If the market was truly excited up here, this bar stack would not be shrinking by 1/2.
Back in October before the selloff, we had a clear Daily uptrend, strong divergence into the highs and then the release.
This time is more complex.
We are in a technical downtrend on the higher timeframe, sideways on the middle timeframes, and now coiling directly under HTF resistance.
So we do not have the same divergence backdrop, but we do have a liquidity vacuum underneath and that heavy band above. Trading is thin because the bigger players see the same thing. CTAs, hedge funds, all the usual suspects are basically aligned:
We are inflated.
Holiday consumer spending is the next big tell.
The high risk trade is being long up here.
They would rather be late on a clean break than first into a selloff.
So they pull back size.
Futures volume gets cut.
Liquidity thins out…. and we chop.
That is literally what is in front of us.
On the 45 minute, this week has been a clinic in why this tape is so hard for high reward to risk traders.
We started with a clean wedge. Simple.
That should have resolved quickly.
Instead of breaking, it tightened and morphed into an ascending triangle.
That shift tells me buyers are stepping higher, but they are doing it without real power.
Every time price leans into the top of the pattern, it stalls.
My structural levels right now:
6901
6878
6867
6852
6831
6805
6787
On the one hand:
Repeated pushes into 6852, 6867 and 6878 keep failing to extend. These are classic failed breakouts inside hinge compression, not trend.
On the other hand:
Dips into 6831, 6805 have not turned into real breakdowns either.
Sellers have not proven anything.
Price is grinding upward, but it is doing it inside a tightening pattern where neither side is willing to show control.
That is the trap.
High reward to risk setups require expansion in one direction or the other.
Real breaks.
Real emotional behavior.
Here… there is almost no emotion.
Until this coil breaks and we see real expansion, the job is not to be clever or become a manufacturer of trades...
The job is to recognize that nothing here has actually changed yet, no matter how busy the chart looks.
Cheers,
PriceTrader