Goodbye August, September is here. Historically September cheer has been reserved for the Bears, with so many tearful moments for the bulls over the years.
Will it be different this year? Who will be able to cheer? Clearly the headwinds remain. There are plenty of reasons to sell.
August saw some wild swings, but on a weekly basis traded sideways.
$SPY 282 remains support, $SPY $294 remains resistance.
Will we get a break of that this month? Or will the wild sideways chop, with huge intra-day swings continue?
Even I don't know the answer to that.
However what I do know is, the share buybacks continue. Passive investing continues. Central Banks are at the ready to unleash more easy money policy. And in the face of every headwind and reason to sell, this market has rallied to new record highs.
I think heading into years end we will hit new highs. The question is... will the rally start from much lower prices first?
I think the short-medium term bullish outlook comes on a break and hold over $294. We got over it for a few minutes last week.
That $SPY $294 level has the moth to flame look. Break, hold, and close above $294 and we could see the record high move come soon there after.
Momentum is still curling higher. And rarely has momentum given up without popping toward an extreme. Perhaps this time will be different.
Of course the VIX and bonds bear watching. The yield remains inverted with bonds continuing to see heavy buying. This will continue to weigh down the financial sector and I'm not sure we can hit new highs without the likes of JPM and GS lending a hand.
Let's see what today brings us. Are we out of the $SPY $8 range days? Will volatility cool? Will markets shrug off all the reasons to sell?
And of course.... thankfully it looks like all those dire forecasts for Florida may end up being wrong. Which is wonderful.