Back in March I did a comprehensive overview of the financial markets that looked at the technical setups across multiple asset classes. Fast forward five months and many trends have continued to play out with dogged determination. Nevertheless, reviewing fresh data can help us pinpoint key areas that represent opportunities or those that should be avoided.

Stocks – Home On The Range

Looking at a chart of the SPDR S&P 500 ETF (SPY), the most obvious pattern is the 5% range that this index has traded in since early February. The key delineation on both sides of this consolidation phase is a low of 202.50 and a high of 212.50.

SPY has gained just 2% so far this year despite multiple false starts in both directions. Right now it is sitting in the middle of this range and many traders are trying to anticipate the next big move in stocks. While it may seem that volatility and sentiment swing to fast extremes, the overall price movement has been comparatively mild.

My advice is to continue to use the established price patterns to your advantage until we see a confirmed break in either direction.

Bonds – Back To The Starting Line

Aggregate bond indexes such as the Vanguard Total Bond Market ETF (BND) have been on a wild ride this year. After peaking in early January, fears over a Federal Reserve rate hike pushed BND into negative territory for 2015. Over the last two months we have seen some stabilization in price that has essentially leveled the index back to the flat line.

The question now becomes, where do we go from here?

My gut feeling is that bonds are going to continue to be a very important asset class to own even during a brief period of monetary policy tightening. The cushioning effect that they provide is essential in the context of a well-balanced portfolio.

However, I would advise investors to closely monitor how their bond ETFs and mutual funds react compared to a broad-based index.   More credit sensitive holdings may see heightened volatility than diversified or multi-sector portfolios.