My conclusion based on the above premises is thus: markets are setting themselves up for a volatility breakout, in all likelihood to the downside. The tricky matter is predicting where and when.
The level of 1157 on the S&P 500 index (SPX) is a worthy candidate for such a turning point. Across long-, medium- and near-term perspectives – i.e. on the daily-, hourly- and five minute- bars charts – this point coincides with resistance from well-defined price channels.
In addition, 1156.48 is the 8.5-month high for the SPX, set on July 7, 2011, and may be reasonably expected to act as a horizontal resistance level.
Charts of the S&P 500 index follow below. Worth noting is that charts of the other principal indices (the DJIA, NASDAQ Composite, and Russell 2000) also show resistance about 0.5 percent above today’s closing levels, points that might be reached simultaneously with an SPX print at 1157.

SPX, 4 y 1d

SPX, 180 d 1h

SPX, 20 d 5m
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