The Nasdaq Composite has pulled back to a level that could spark a short-term rally.

Until the S&P 500 clears the 200-day moving average, traders can expect more of the same wide and choppy price action.

The main stock market indexes are likely to remain stuck in a wide, sideways trading range for the summer.

A single round of churning, or even distribution, is not damaging enough to kill a rally, but it's still noteworthy for the bulls.

A sudden, sharp retracement lower by the S&P 500 after probing beyond its 200-day MA would not at all be surprising. However, a convincing move above the June high would cause the S&P to reverse to an intermediate-term uptrend.

In raging bull markets, buying breakouts above bases of consolidation can be a very profitable strategy. But in less convincing markets, such as the one we're in now, a lower risk strategy for buy entry may be to wait for strong ETFs to subsequently pull back to near-term support levels.

Near-term sentiment is certainly improving, as indicated by yesterday's technical breaks of resistance in the major indices.  Leading individual stocks are also starting to break out.

In the very near term, yesterday's intraday highs of the major indices are pivotal levels of resistance. If stocks get above yesterday's highs, preferably on higher volume, it would cause most of the main stock market indexes to reclaim their 50-day moving averages, perhaps improving near-term bias of the overall market.

Due to yesterday's bullish, higher volume reversal, near-term momentum could easily enable the S&P and Nasdaq to move back above their 50-day moving averages.

With the S&P 500 undergoing a failed breakout in mid-June, followed by a failed breakdown in early July, it may be wise to not harbor any strong opinions regarding broad market direction right now.