After a 6 month non-stop bull rally, stocks have peaked at just below 1700. Since then we have had a successful retest of 1600 and the 50 day moving average. Now stocks are floating higher in the range.
So what will it take for stocks to breakout of this range?
Take your pick of the following options.
1) Stocks breakout higher after another strong earnings season or positive economic event (ex. strong jobs report, GDP etc).
2) Stocks breakout higher with no fresh catalyst. Simply with no real bad news to hold them back, stocks clear 1700 as the bull rally continues.
3) Weak economic news hammers stocks as they go below 1600.
4) Stocks are overbought right now and it will not take any real catalyst to fall below 1600.
5) Other, please explain.
Now it's your turn. How will things turn out and be sure to share the reasons why that you think that will be the case.