The process of the S&P 500 (SPY) settling into a trading range continued last week, as it has with most of the major indexes. However, there is a subtle yet important difference in behavior to note. Whereas other indexes have had more volatile price swings within a price channel, the S&P 500 appears drawn like a magnet to a basing process at the 2260 area. It may, therefore, be somewhat more fragile in trend given that this basing began more than two weeks ago with only two minor pushes higher. A break below 2260 in the context of a more normal trading week might be cause for real concern technically. Resistance just below the life high is at the 2275 area.

A look at sectors for the past week shows two areas of strength - Telecommunications and Utilities - but a general slackness elsewhere. Healthcare and Materials were the weakest sectors, which, by their additional weighting, subtracted from gains in other areas. If the index is going to try for new highs, it will need to regain sector momentum, which at time of writing seems absent.