As time continues to fly by, now almost halfway through December, the markets have shown us little as to where they want to go.

One thing that sticks out to me is that in the last 24 days, we’ve only seen the market close on/near the high for 7 days. With a stat like that, it is easy to understand why the markets haven’t pushed higher into fresh, new ground.

The bulls gets some kudos here also. Of those same 24 days, only 1 has closed on/near the low.

Either way you look at it, we still end up in the same situation: narrow trading channel and very little direction in the markets.

If the market continues to rally and approaches the top of the trend channel, keep an eye on volume. If volume picks up and prices are unable to close on/near the high for the day, it is a good bet that our sideways trend will continue.

This would show that there is still supply in the market and that until the supply is removed, the market cannot rally higher.

Here is a look at the 2 recent days where the Smart Money was most active:

While both of these major days of activity both closed up, only one of them was a sign of strength. As you can see, I have marked them appropriately.

The first marked day is strength because of the close. The market finished on the high of the day and is right at the bottom of the trend channel. On the other hand, the weakness is seen on the second day because the market closed in the middle of a rather wide range at the top of the channel.

Overall, all we have at the end of the day is a flat market. All we can do is wait and watch for a new direction.