While overall I am bearish in this market until we close above 2943 in the S&P and 26,400 in the Dow, I believe there will still be good opportunities in this market to close longs and slowly add inverse positions.
In the near future I do not expect the market to tank but trade within the range in a falling descending triangular wedge. Whether we break to the upside and re-test 2943 or fall below hard will be based on the rate cuts (or lack there-of) from the Fed.
For us to drop below this range prior to the Sept Fed meeting, there would have to be an escalation (again) of the China-USA trade war which, is always possible, however I do not expect it at this time. That being Trump is a market manipulator and wants Fed rate cuts so who knows what could happen.
In the near term I believe we will likely drop down on the backs of the September 1 tariffs going through as well as weak GDP data. I also expect a bounce when the ECB is likely to cut rates, followed by a drop as per usual "pending the Fed's decision".
In order for us to break-out to the upside of this wedge (2943+ close) the Fed must cut 50bps. I do not see this happening and I see a break-down in the market by the 3rd week of September.
VALID ONLY If No Trade Escalation 24hr Target if No Cuts: 2740 then eventually 2350 December Lows (progressively) as Trump will likely manipulate the market for bounces off false trade talks. 24hr Target if 25bps: 2838 24hr Target if 50 bps: 2943