FX:SPX500   S&P 500 index of US listed shares
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Some believe the market put in an intermediate high (V) at 2194 but the sloppy price action following this possible high is less than convincing, suggesting another high is possible before a serious correction.

Price has established a new channel and the green lines are prices of interest. 2188 ish             , which is flagged, is particularly interesting, as it’s a both a retracement and expansion level and a level of resistance. And at this level, slightly below the dotted trend line , we have a bearish Gartley with better than average ratios.

A second level of interest is the area around 2191.50 to 2192.50, an area directly below the recent high. Above that, we have the upper limits of the trend line that stopped the market at 2194 followed by the critical zone between 2197 and 2204.

In the EW blogosphere, some are calling for a 5% correction which would give us a decent short and lower prices for the bulls to push things higher. But with VIX             subdued and the market “risk on” with high beta and small caps outperforming the broader index, a decent correction is unlikely until market internals change, even if only briefly. Until this happens, pullbacks are likely to remain shallow.

But as I have said before, we might see some volatility between September 19th and October 9th which, historically, are the worse weeks of the year for the market, specifically weeks 38 through 40. At the same time, the Fed could surprise us next month when they meet on September 20, 21 but CME             futures are only assigning a 12% probability to a rate increase.

And it would be highly unlikely for the Fed to telegraph anything at Jackson Hole next week when the Fed is likely to offer a stronger signal about the likelihood of near-term rate increase with option of raising rates in September if economic and financial conditions permit. But as with CME             probabilities, only 20% of economists interviewed by MarketWatch see a September rate hike. Most are looking at December.

And the Fed will not have the August employment report scheduled to be released September 2nd which will seriously limit their ability to offer a firm course for rates at Jackson Hole. But with all of the recent rate jawboning, a very strong jobs report could unsettle the market particularly if near a pivot .
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