Respect price over opinion when the S&P 500 range is inside a multi-month 'trading box'

March 4, 2026

TL;DR

The S&P 500 is currently testing the lower boundary of its trading range, referred to as a 'trading box.'
Nicolas Darvas's strategy involves buying stocks that break out of clearly defined trading ranges ('boxes') and selling higher.
Darvas's method requires psychological discipline, as buying at higher prices can be uncomfortable.
He focused on stocks capable of significant movement, identifying potential in those consolidating within a range before a breakout.
Darvas prepared trades in advance by placing buy stop orders above the range and protective stop orders below it.
The S&P 500 has oscillated within a range for over two months, building energy for a potential resolution.
Internal market dispersion is significant, with some individual stocks reaching new highs while others experience deep drawdowns.
Darvas's approach included strict adherence to process, such as only buying (not shorting) and relying exclusively on stop losses to manage risk.
He believed 'the market is never wrong — opinions often are' and that price, not emotion or opinion, should dictate actions.

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