We cover this index quite often because of the effects this index has on risk and vice versa. In September we had the initial drop and then looked to be building a bear-flag pattern. However as quickly as it broke down, it bounced right back into the channel shown in the chart below.
There has lots of chatter about an inverse head and shoulders pattern forming. We would like to point out that these types of patterns, typically form after a long downtrend not in a longer-term uptrend as the S&P 500 Index currently is.
As noted above, we are seeing heavy volume spikes on down days. This could be a sign a continuation the downside in the future. For now we are expecting more sideways chop. As we get closer to the election, we should see break of that channel one way or the other.