My indicators have improved somewhat to neutral, a slight upgrade from last week’s negative readings, which means we will have to rely on the market’s behavior for contextual clues as to what’s next.

The biggest story this week was the announcement from the Federal Open Market Committee (FOMC) on Wednesday, and the market has been celebrating the fact that the Fed left interest rates unchanged ever since. It’s been my stance for some time that the Fed is essentially locked into staying pat. There may be a quarter-point increase in September or December, but I would say the odds are that it won’t even occur this year, given the outrageous U.S. debt that would be exacerbated by a jump in interest rates and what continues to look like a shaky economy. Gross National Product (GNP) was negative last quarter, and I don’t expect to see much of an increase this quarter, either.

There are other warning signs flashing throughout the market as well, including recent disappointing earnings reports from massive organizations like FedEx (FDX) and Oracle (ORCL), which led to our exit from the Oracle spread, unfortunately. This suggests that the economy may be weaker than many want to believe.

In fact, I would even go so far as to submit that Fed Chair Janet Yellen and the FOMC are actively trying to deceive investors and people all over the world regarding the health of the economy. All of the statistics given during Yellen’s press conference, in a sense, were deceptive. For instance, the Fed may say that the unemployment rate is 5.5%, but the real unemployment rate (the U-6 rate) is in the teens. I’ve shared before that the key number to pay attention to is the labor-force participation rate, which, at approximately 63%, is one of the lowest levels in over 30 years. Take everything the Fed feeds you with a large grain of salt.

While my indicators may be neutral, we can’t ignore the signs like the sell signal in the Dow Jones Transportation Index (DJT). Although it can be argued that there aren’t a lot of stocks in the average that are true “transportation” stocks anymore, it does tell investors that the underlying economy is not looking as good as it should.

We also can’t overlook the froth in both merger and acquisition (M&A) activity and initial public offering (IPO) markets. Thursday’s FitBit (FIT) IPO is a good example. Investors are paying too much and drove the stock up 10 points (50%) on Thursday, so you always want to be a little leery of these overvaluations.

While the S&P 500 looks to be forming the right “shoulder” of a “head-and-shoulders” pattern, for now, we remain in the ongoing trading range, with very little expected to change in the short-term. It may sound like a broken record, but that is the nature of trading ranges. Eventually the market will break out or break down and, while my indicators are not making a compelling case either way at the moment, I’m personally leaning toward a break lower. Markets usually make their tops in June or July, and then they retest those tops in October.

While many other traders are taking time off this summer, I don’t adjust my activity at all. I always trade regardless of the date, and I’m continuously looking for opportunities. I found one in a relatively stable stock that the chart indicates will hold up in the short-term as we ride out this trading range.

Buy to open the Starbucks (SBUX) Aug 57.50 Calls (SBUX150821C00057500) at $0.60 or lower. After entry, take profits if the stock price hits $56.30 or the option price hits $1.30. Exit if the stock price closes below $53.00.

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