As expected, Fed Chairman Ben Bernanke’s did not offer up QE3. Initially, traders were concerned but new hope developed that something is likely to be announced after a two-day meeting in September. While it was a clear victory for the bulls today, the volume remained subdued. We are now in a clear trading range between 1120 and 1205 of the S&P 500, but the intermediate trend is still downward. No matter where we go there are always some incredible calls in the chat room and on the midday posts from Mrkt_Rwnd aka Jeff. He called today’s SPY top to within one penny in our chat base on the mid day post chart in the upper right hand corner. Awesome stuff!!!
There are a few positive sparks beginning to emerge, like the retreating of the VIX, the higher low put in today, the ability to rally above the recent congestion zone of 113-116 and positive inter-month seasonality before Labor Day. Negatives are that European sovereign debt problems remain unresolved and tendency to give back gains following FED days. Germany market has also been under tremendous pressure to save Greece and from short bans in other European nations. Trichet’s speech this weekend in Jackson Hole could impact trading on Monday.
The Rally today had an end of month mark up feel. The GDP number this morning net out CPI inflation would put us in the negative growth zone. If next Fridays Nonfarm Payroll do not show improvement, it could reignite double dip recession fears.
