Markets are Asleep, Sorry if You Traded Them Yesterday

I took the day off yesterday, not because I knew the markets would be dull, boring or dead, but because I simply had other obligations. In any case, looking at the current market action and price, reading the technicals of the charts and considering the fundamentals of the economy, I have come to the following conclusion regarding what will happen next; I have concluded that I have absolutely no edge in predicting the next direction in the market (At least in the short-term. My longer term outlook is that US equities will push on to make higher highs). We are in a state of limbo right now. Since breaking above what I termed the critical 1304-1305 level, the action that switched my overall bias to neutral, the market has done absolutely nothing and it seems like nobody has really traded it aside from the HFT Algos. Luckily for the machines, they never get bored.

What we have become used to in the past, especially in the last two years, is that markets have generally crept upwards when there was low trading volume. The supplemental liquidity that the HFT Algos provide almost always churned the market up in low volume action (or inaction). This has not been the case in the last two days. Markets haven't exactly sold off, but they haven't drifted up either.

Though I have no intention of taking a long or a short position here where the ES is trading now (1305 as I write this), I am prepared to act depending on which way this market moves from here. Below I have outlined a couple of possible scenarios and how I will trade them.

At this point, if the market is going to continue higher, it will most likely see a dip first. If we do dip down and volume doesn't intensify, I will be looking to buy the dip. There are a couple of support price points that I like on the ES.
1) 1293-1294.
2) 1289-1290.

If the market continues lower from there, the next support would come in at 1283.50 to 1284.50. I will consider a long here as well, but if the ES trades this low, it could signal further weakness. I would consider taking profits at 5 points if I got five points. In fact, as long as I have a neutral stance in the market, I look to take profits when I get them as I don't have any signal that there is trending action. This is what being neutral means. Expect choppy market action until a new trend emerges.

If support holds and ES reverses up from 1300-1301, I would look to enter a short position at
1) 1310-1311.
and/or
2) 1319-1320. Yes I will consider a short here, but will be cautious as this price point would be after a breakout above the previous consolidation high of 1315 on the ES and could indicate a continuation higher.

As long as I remain neutral, I like buying support and selling resistance. I also don't mind staying out of the market when I don't feel like I have an edge. We could see a lot of confusing and choppy action for a little while. If you do trade in the chop, often times it is wise to increase your tolerance for heat. If you don't respond well to taking heat when a trade goes against you, sometimes it is best to stay on the sidelines until a new trend emerges...

As soon as I see more conclusive market indicators, I will comment on them.