On January 30, I warned that the market was likely approaching a chop zone, and that's been a pretty accurate description of the action since. It now appears that a sustained break of the levels noted below will lead the market out of the chop zone. Right now I'd have to give odds to an upside break fairly directly -- but since this is a fourth wave, and fourth waves are known to mutate into overly-complex corrective waves, I hesitate to convey too much confidence (readers will recall that fourth waves are my arch-nemesis!).
The S&P 500 (SPX) chart illustrates some levels to watch. I'm inclined to believe that either the black count is in play, or the rally from 1495 to 1514 was only wave i of 3. However, in the event I'm wrong, a sustained break of 1495 would indicate that a deeper correction was most likely underway. Note the potential ascending triangle pattern, which is generally bullish. The dashed red trend line should be of value if black wave (4) is in play.
The Philadelphia Bank Index has now captured the 54.90 target of January 23. I've outlined the black count as the alternate simply to differentiate the two counts, but I'm actually somewhat partial to the black count. In either case, I'm content to wait for the price action to point the way.
In conclusion, while the chop zone has indeed been in full effect, there's still nothing that indicates a larger correction is underway. The market presently appears coiled, and I'm favoring an upside breakout here -- but given the nature of fourth waves, I hesitate to get too married to that outcome. Trade safe.