The day after Christmas (12/26) saw a huge rebound in the markets, Volatility begets volatility and the market is still in a high volatility cluster. However as far as direction goes, we are probably going to see some sideways action after this sharp rebound. Let's take a look at the S&P500.S&P500 (Daily Chart)(click to enlarge)V-shape Rebound:- The sharp decline before 12/25 was matched with a sharp rebound on 12/26.- I think we should consider the recent low just above 2350 to be a price bottom at least for a period of consolidation. - The overall market could still be bearish in 2019, but we can anticipate more sideways action first.- This V-shape rebound could have established the bottom to this sideways action.- If price falls again to 2400 or lower, I think the market will respect the 2350 support and buy at or above it. - If it does, I think the volatility will start to come down, and we might see some congestion (like a triangle or wedge pattern)- The upside should be limited to 2540, or at most 2600. These were the lows and support levels in 2018 before the latest correction since October.