Unless there's a major surprise in the next few days, the S&P 500 will end 2011 right where it began the year - at the 1,260 price region making this a stagnant year despite two big volatile periods.

Let’s take a pre-end of year view of where the S&P 500’s been, what major patterns developed, and why in the world 1,260 was so important all year long.

Click on image to enlarge!

As 2011 began, the Federal Reserve was in the middle of a second round of Quantitative Easing – an aggressive policy designed to combat deflation by creating inflation whereby stock and commodity prices benefited.

The QE2 program officially ended on June 30, and despite one final swing up that fell shy of the 2011 high, the market collapsed in August in part due to the deterioration of the situation in Europe and in another part by the “Debt Ceiling” debacle and the subsequent US Credit Downgrade by Standard and Poors.

Price stabilized, the Fed began Operation Twist, the index bottomed with a vicious Bear Trap under 1,100 on October 4th which gave-way to a 15% power-rally.

Since then, price formed a small Symmetrical Triangle Pattern, it broke to achieve its target, and then December was its own narrow consolidation in the context of the confluence resistance at – surprise – 1,260.

Quantitative Easing, Operation Twist, Europe, Sovereign Debt, Greece, the “Arab Spring,” US Congress gridlock, Japan Earthquake, Central Bank Intervention – all these major headline events contributed to stock movement in 2011.

Let’s now shift to a “pure percentage” view of the Big Three US Equity Indexes:

Click on image to enlarge!

Despite these big headline events and crises, the Stock Market stayed contained within well-defined ranges and shallow percentage moves for the majority of the year – August and October being the major exceptions.

At the peak – comparing with the 2011 January open – the market increased by 8% while at the bottom, the market fell by 12%.

It may feel like the market gyrated beyond those levels but it didn’t – 2011 was a range consolidation, flat sort of year despite everything that happened.

For more daily updates from Corey, visit his blog at Afraid to Trade.com