This morning’s bounce on possible FED intervention did not help and it trapped more eager bulls as no one seems to want to hold over the weekend. Market players aren’t rushing in because of the cloudy fundamental pictures in Europe and USA . In addition, recent earnings had started to show deceleration. It will be difficult to calculate forward earnings with so many macro overhang.
Until some of the issues are resolved, we will have a hard time to rally consistently. We are points away from taking out the Aug 8th closing low and we may over shoot a bit to shake out the remaining bulls. We also need to look forward to the Jackson Hole speech next Friday and the market’s reaction before the speech.
