With the highly anticipated Powell Jackson Hole appearance less than two hours away, the market is already being dealt a downside blow with more China Tariff headlines.
The $SPY is down $3 from its pre-market highs, with Powell set at 10am to likely add more fuel to the downside bon-fire.
If Yellen or Bernancke was Powell today... I'd be fairly confident of a move higher for the markets. Yet Powell as evidence by his most recent FED presser instills very little confidence when he speaks. And as such, the odds favor a pull back today.
The problem is futures are already pulling back. Just how much further can we fall.
I highlighted recently the $SPY $294 level as the top side of a recent channel the market has been in. Yesterday we hit $293.93 before sharply reversing course.
Strong support rests at $282. If Powell pour a bucket of ice on rate cut prospects, things could get rather ugly, with the $SPY potentially hitting that $282 level today.
Or will Powell break from his mold, and help send the markets higher with a more dovish tone today? Only Powell knows... and even then you can argue he really doesn't.
Rate cut odds remain nearly 100% for September.
And odds for two .25% cuts before years end are near 50% with chances of three .25% cuts near 30%.
Let's see how that changes after Powell.
Powell Plop? Or Powell Pop?