After two successive gap-fills this week, the market has been consolidating about as mildly as it can considering how much ground has been covered in the past two weeks.
The updated 30-minute SPY timeframe below indicates just how tight the current pattern is, with $142.10 being a short-term ceiling to crack.
Also note the still unfilled gap from 11/19. Recall that most gaps do get filled, which is why they are called “common gaps.” Occasionally, though, a breakaway bullish gap will not get filled for very long periods of time. The market still has much more to prove if we are going to new highs imminently. However, the longer that gap stays safely away from a fill, the more likely it becomes we saw a breakaway.
Either way, it is hard to argue that the bulls have not done a valiant job of not giving much back from the two week rally we have just witnessed. The nature of the consolidation now becomes the name of the game going forward.
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