In summary, it looks like things are going to be very interesting in the new year. For now, it is necessary to remain bullish, but alert.

The market is strong, as evidenced by new all-time highs in all four major indices this past week. Since price action is the most important indicator, the overall trend remains bullish as long as SP-500 holds above support.

There is a short-term support at 3725. Below that, there are two important support areas, the first is at 3630-3650, and the second is at 3550.

So, what could possibly go wrong? Well, there are plenty of sell signals that could be setting up.

"Trust your gut."

Don’t do what you know on a gut level to be the wrong thing to do. Don’t stay when you know you should go or go when you know you should stay. Don’t fight when you should hold steady or hold steady when you should fight. Don’t focus on the short-term fun instead of the long-term fall out. Don’t surrender all your joy for an idea you used to have about yourself that isn’t true anymore. Don’t seek joy at all costs.

I know it’s hard to know what to do when you have a conflicting set of emotions and desires, but it’s not as hard as we pretend it is. Saying it’s hard is ultimately a justification to do whatever seems like the easiest thing to do—have the affair, stay at that horrible job, end a friendship over a slight, keep loving someone who treats you terribly. I don’t think there’s a single dumbass thing I’ve done in my adult life that I didn’t know was a dumbass thing to do while I was doing it. Even when I justified it to myself—as I did every damn time—the truest part of me knew I was doing the wrong thing. Always.

As the years pass, I’m learning how to better trust my gut and not do the wrong thing, but every so often I get a harsh reminder that I’ve still got work to do.

In summary, there are lots of crosscurrents right now. The SP-500 support area at 3630- 3650 has held so far. The SP-500 chart remains bullish and will stay bullish until it breaks 3550 area.

Violent downswings happening into Monday morning's stock market opening. We'll see what happens from here on. Lots of news to fuel the fire. Staying cautious until this sort itself out.

The major indices - $SPX, $NDX, $DJX, and $RUT - are all at new all-time intraday and closing highs now. Clearly, this market has momentum.

We have to remember that markets look the best at their high and the worst at their low. The market is overbought, but overbought doesn't mean "sell".

 Both 200-day and 50-day moving averages are rising. Uptrend continues for now.

At issue now is whether we are witnessing another mild, one-off dip or, instead, the beginning of a larger market correction.

In summary, the market is overbought and getting more so almost every day.

Over the past three days, SP-500 finally managed to break out to new all-time closing and intraday highs. Thus, the SP-500 chart is bullish, as there is no classical resistance -- by definition -- when it is at all-time highs.

The reason people don’t make big money in markets is because they chicken out too soon. The reason people blow up their accounts is because they don’t chicken out fast enough.

 "The secret to winning is learning how to lose.

That is, learning to bounce back from failure and disappointment—undeterred—and continuing to steadily march toward your potential.

Your response to failure determines your capacity for success."

"One very important skill great traders have is the ability to gauge when to step on the gas and get aggressive and when to ride the brake or even sit out completely. Most of the time you should not be trading very aggressively. Trading requires a lot of patience and stalking."

In a good trading environment stops will hold on balance while breakouts get away from you and you wish you had bought more. In a poor environment, prices will slice through stops, slippage is larger than normal and on balance you struggle to make progress or show loss.

In summary, the broad market chart remains bullish and will continue to be bullish as long as SP-500 continues to close above 3500.

We are entering a seasonally bullish period for the market, between Thanksgiving and the new year. On average, the Russell 2000 Index rises 2.8% over that time period, with SP-500 not far behind. There are exceptions, of course 2018 being the largest exception. 

"A most beneficial use of time is silent meditation, while searching for guidance from within."

We all experience rare moments when a blinding revelation comes to us, when we suddenly see things differently than ever before. Usually, however, we learn the truth about ourselves gradually, over long periods of time, from quiet introspection. We are all spiritual, but some of us have learned to tap more effectively into the great strength that resides in the spiritual portion of ourselves. The spirit is not boisterous and noisy. Getting in touch with your spiritual self demands tranquility and solitude. Make sure you dedicate a portion of every day to thought and study, to think and reflect upon your life. Choose a time and place that best allow you to relax your mind and devote your thoughts to reflection.

Extreme Greed. Fear & Greed Index is at 91.

 

"Not enough is said about the power of thinking about one topic for a long period of time. If you revisit a topic continually for a few years, most problems (and many solutions) will occur to you at some point. Expertise can be the gradual accumulation of many modest insights."

In summary, the SP-500 chart looks bullish and will stay bullish unless SP-500 closes below 3500.

 The broad market, as measured by SP-500, finally reached a new all-time closing high this week on Tuesday, November 16th. It was unable to hold that level and has now fallen back a bit. In fact, it has closed back below the old September highs of 3588. 

"Whatever the mind can conceive and believe, the mind can achieve."

 

The market remains volatile and -- so far -- within its previous trading range, on a closing basis.

Last Monday, the COVID-19 vaccine news caused SP to gap up on Monday's open.That was the largest percentage gap to a new all-time high in history.

As traders know, there's an old adage to "sell the news," especially if there has been anticipatory buying before "the news." And they did, driving SP back inside its 3200-3600 trading range.

It still seems that a close above the highest prices reached in September -- would be an upside breakout and would have follow-through. So that is near-term resistance. A breakout to the upside would be worth following.

"When valuations are extreme, turns become inevitable, and a small shift in sentiment is often all it takes to initiate a [huge] swing of the pendulum."

In summary, SP-500 is range-bound and volatile.

Election-related or not, the move from the bottom to the top of the SP-500 trading range in just four trading days was impressive. Trading range trading until there is a break-out. The recent moves have pretty much wiped out what had been a support and resistance area so the edges of the range itself are the only meaningful support and resistance currently.

"It's interesting that everything is up today as the dollar tanks [except] oil, and some oil related stocks. That's because investors do not expect actual economic growth that would require more energy, just more stimulus that pumps up asset prices as it sedates the real economy"

What price action to expect after the Election ?

One scenario is for the market to rally after the election. Why? There are three reasons:

• If Biden wins, people can expect a large stimulus package.
• If Trump wins, people can expect favorable business policies to continue.
• Regardless of who wins, everyone will be relieved that it is all over and buy the market.

In summary, there are plenty of cross-currents at this time. The bulls have been wounded but are not dead just yet. However, a close below 3200 by SP-500 would be very negative and would reinforce the bears hold on the market.

Anything is possible.

 Now the only remaining near-term support area is at 3200. If that gives way, a pattern of lower highs and lower lows will be in place, and that is the mark of a bear market. That would be a game- changer.

The market continues to be bullish and it will continue to be bullish as long as the SP-500 continues to close above 3400.

"At first, I thought that intelligence was reality and price the appearance, but after a while I saw that price is the reality and intelligence is the appearance."

 TRADING 

A history of bull markets.

Based on history, this bull market is still in it's early stage. With Fed's commitment to low rates and aggressive support to the economy, corrections are buyable cyclical events within a secular bull market.

The S&P-500 chart is bullish and the market is strong for now, but it looks like it's waiting for its stimulus check. Stimulus has become the new drug and the search for a fix continues.

This pullback seems normal, so far, and the bullish case is still intact as long as SP-500 remains above 3400.

"A SIMPLE FORMULA FOR LIVING"

1. Live beneath your means.
2. Return everything you borrow.
3. Stop blaming other people.
4. Admit it when you make a mistake.
5. Give clothes not worn to charity.
6. Do something nice and try not to get caught.
7. Listen more; talk less.
8. Every day take a 30 min. walk.
9. Strive for excellence, not perfection.
10. Be on time. Don't make excuses.
11. Don't argue.
12. Get organized.
13. Be kind to unkind people.
14. Let someone cut ahead of you in line.
15. Take time to be alone.
16. Cultivate good manners.
17. Be humble.
18. Realize and accept that life isn't fair.
19. Know when to keep your mouth shut.
20. Go an entire day without criticizing anyone.
21. Learn from the past. Plan for the future.
22. Live in the present.
23. Don't sweat the small stuff. It's all small stuff.

In summary, equities are looking much improved across the board although running a bit rich and considering the massive upthrust it could continue or work off its overbought reading by treading water. Of course, if there is a contested election it all could become unhinged. Stay tuned!

Value stocks beat growth last month for the first time in a year. Will this trend last ?

Some people think this trend could last. They think if Democrats win, that will lead to more fiscal spending, which would help cheaper stocks, and higher taxes, which would hurt growth stocks, like big tech.

There is no way to know how this is going to play out.

The main "line in the sand", at 3300 is still in place. A close above resistance, at 3430 would be bullish for the SP-500 chart and for stocks in general. On the other hand, if SPs were to close below 3300, then the bears would have the upper hand.

What do you need to do to win the 4th quarter ?

 "When you experience someone else’s genius work, a little part of you feels, 'That’s what I could have, would have, and should have done!'

Someone else did it. You didn’t. They fought the resistance. You gave in to distractions. They made it top priority. You said you’d get to it some day. They took the time. You meant to.

When this happens, you can take it two ways: You could let that part of you give up. 'Oh well. Now I don’t need to make that anymore.' Or you could do something about that jealous pain. Shut off your phone, kill the distractions, make it top priority, and spend the time.

It takes many hours to make what you want to make. The hours don’t suddenly appear. You have to steal them from comfort."

End of the quarter.

"Stuck in the middle with you"

Where does the market go from here ?

Technically we have broken the support and the SP-500 chart is negative as we have a pattern of lower highs and lower lows, but...

Should stocks continue lower, Fed will most likely step in with accelerated levels of quantitative easing as they always have since the financial crash of 2008. But even if they don't, Trump can ultimately unlock $300 billion of unused stimulus without congressional approval if need be as he did in early August. During a news conference on September 4, Trump said another $300 billion in unused stimulus aid could be provided if Congress doesn't vote to redirect those funds.

Warning state.

                                                          If the Fed gives up, not good.

Sentiment over SPs

SP-500 closing price below 3300 should be significant, especially on a close below 3280. Unless there is such a breakdown, the SP-500 chart can still be considered to be bullish.

 

The state of the stock market.

From a technical standpoint, the market was extremely over-bought (and continues to be), so a pullback like this is very normal. There are plenty of non-normal things about the market right now, but a rapid pullback after a rapid rise is not one of them. If the pullback keeps going it could turn into another story, but it’s not there yet.

Until SP-500 breaks support at 3280, the SP chart will not be bearish.  If we break support, then a more severe downside move will most likely to follow.

If we don't hold today's low then "all bets are off", but if we do, possible blow-off top is next, stay alert.

"Theory of Reflexivity states that investors don't base decisions on reality, but rather on their perception of reality. The actions that result from these perceptions have an impact on reality which then affects investors' perceptions and thus prices."

Nasdaq exploring new high ground.

Nasdaq rallies into new high ground, but fewer and fewer stocks are supporting the rally. The % of Nasdaq stocks above their own 50-dma has been diverging as it did before market pullbacks in February 2019 and March 2020. "This suggests you should sell into a melt up"

The path of least resistance is to the upside.

In summary, there are no confirmed sell signals, as you can see the chart is strongly in an uptrend, but in the context, you need to stay alert to execute bearish signals, take positions if and when confirmed sell signals appear. Until then, stay bullish and enjoy the ride.

"I’ve always had the view that how successful you are is really a function of how you deal with failure. If you deal with failure well and you persist, you have a high probability of being successful."

Are you ready for tomorrow ?

Thursday, August 27. tomorrow at 6:10 AM PST, Chairman Powell will release a speech addressing the new policy framework for the Fed from a virtual Jackson Hole central bank meeting. This event has the potential to move market considerably--both up and down--if certain topics are addressed or not addressed.

Last week shortly after the release of the FOMC minutes, many of the markets that had demonstrably rallied (precious metals, Euro etc.) sold off sharply. The ostensible reason was the circumspect lines in the minutes vis-a-vis a the Fed's feelings towards a Yield Curve Control policy. None of this should have come as a surprise to markets but it highlights the chance for some intraday volatility and how the general lack of liquidity in the markets now can create some fireworks.

The trigger for a sell off tomorrow in gold and risk assets will be if Powell's speech inexplicably fails to address the openness of the Fed has to an inflation overshoot. 

The base case for most market participants is the Fed comes out and acknowledges their chronic failure to reach their inflation target of 2 percent, and that letting inflation run above this for some reasonable/unspecified time as deemed appropriate/consistent with the incoming data is wholly consistent with their mandate/new framework.

There is the possibility Powell's speech talks about more QE being needed and I think such mention could send the algos buying gold, however, the takeway I'm looking for is what can be gleaned in terms of how long the overshoot lasts.

In summary, SP's still look positive, that is the most important market indicator, and if SP-500 doesn't break support at 3200 the price trend will remain higher. So, there is no panic, SP-500 is trading around all time highs and it's all good for now, but you better be very observant next 4 to 6 weeks.

 

The post 1929 crash rally lasted 124 trading days. The post 9/11 rally lasted 121 trading days. Today is 106 trading days after the March 23, low.

 

"When you see better returns buying laggards, signs of a trading range environment."

The path of least resistance is still to the upside.

Enjoy the ride !

"A few things you need to achieve exceptional results"

1) Quantity: You take lots of shots.

2) Quality: You take thoughtful shots.

3) Consistency: You keep shooting for a long time.

4) Feedback. You take better shots over time.

5) Luck: You get a few favorable bounces.

In summary, the market seems to be running out of gas, but undeniably still going and holding above support. So the bulls remain in charge unless SP breaks down below support at 3200.

  

             On your long equity positions raise stops and enjoy the ride.

Today is officially three months before US election. Stocks have a good record, being right 87% of the time since Great Depression, of predicting who is going to win in November.

If stocks are up, the incumbent party wins. |If stocks are down, the incumbent party tends to lose.

In summary, the market seems a bit tired, but SP continues to hold above support. So the bulls remain in charge unless SP breaks down below support at 3130.

In summary, the market is deciding where to go from here to make a strong directional move. Markets move violently to their place, and calmly in place. For now that is a trading range market until one camp or the other can get enough momentum going to engineer a breakout.

The market is still bullish unless the support is broken.

Market still sidways, but don't complain:

“Sister, there are people who went to sleep all over the world last night, poor and rich and white and black, but they will never wake again. Sister, those who expected to rise did not, their beds became their cooling boards, and their blankets became their winding sheets. And those dead folks would give anything, anything at all for just five minutes of this... So you watch yourself about complaining, Sister. What you're supposed to do when you don't like a thing is change it. If you can't change it, change the way you think about it. Don't complain.”

Ready to take off ?

Which way ? One way or the other, but be ready for a large directional move when we do break out. On your long equity positions raise stops and enjoy the ride.

Just about every asset across the board has put in reversal or outside day down. If we don't see follow through with strong momentum to the downside, then we could have a bear trap.

QQQ

 Bearish divergence, divergences against the trend are usually short lived, but worth noticing in the context, also often after three pushes up there is an ABC formation. Coming week will be an important tell one way or the other.

After a historic capitulation low, commodities appear to be firming and we could see early stages of a bull market rally across the board in commodities.

Happy Canada Day !

Maximus

Ninja

Nasdaq, yesterday's low is a support / major abort area if it doesn't hold. Watch to see if we can explode higher.

We can see now cumulative advance-decline lines making lower lows and lower highs. Would need a close below 3000 to confirm a bearish tilt, until then it's all "under the hood."

The market has stalled out recently. In the near-term, the bulls would like to see a close of the gap on the island, while the bears are looking for a breakdown below support. From a longer-term perspective, the picture is still one of caution, as the bulls won't fully be in charge until VIX closes below its 200-day moving average.

In summary, a more bearish outlook is justified as long as VIX remains above its 200- day moving average and as long as that island reversal is in place on the SP-500 chart.

"History has shown, and logic dictates, that if the system doesn’t strive to create equal opportunity for everyone who is able to work and to provide basic support for everyone who is not, the system will inevitably experience some form of revolution."

I had hoped for a reflation trade across commodities to have some legs, but its worth noting the five day risk / adjusted returns are weighted to the downside.

"If life hands you a lemon, don’t complain, but instead make lemonade to sell to those who are thirsty from complaining."

Wally Amos, the man whom many consider to be the father of the gourmet cookie industry, has turned lemons into lemonade so often in his life that in his official portrait he holds a pitcher in one hand and a glass of lemonade in the other. A perennial optimist, Amos refuses to acknowledge that obstacles are anything other than stepping-stones to success. In a career that has spanned several decades, he has made it to the pinnacle of success several times, only to lose everything and be forced to start over. But he’s never lost faith. “You have to have the trust and faith to let go and not agonize,” he says. “Don’t waste your time worrying. Worry is not preparation. Analyze the situation and focus on solutions. There is always an answer.”

For now, it's just a very sharp pullback in what is still a rising trend on the SP-500 chart. The bears have more work to do if they want to take control.

The overbought conditions intensified this past week with a couple of huge up days on June 5th and 8th, but then exploded into one of the worst down days in history on June 11th. The wild ride seems destined to continue.

Wild ride, it was starting to get ugly today, but then...

In summary, the short-term momentum is strong. We are seeing some extremely overbought conditions, as traders who had been cautious are now throwing caution to the wind. We will wait for confirmed sell signals before doing any shorting and/or put buying, and will wait for a price breakdown by S&Ps before any positions are established. Meanwhile, continue to ride the uptrend.

"Govopoly in the 39th Day"

Seykota wrote in his seminal book "Govopoly in the 39th Day" that when the costs and consequences of regulation outweighs productivity, that is the beginning of the end for that society. He said we have never been closer to that tipping point. He calls it the 39th day because in a pond ecosystem, duckweed doubles each day. He equates duckweed with government regulations. By the time you reach day 30, the amount of duckweed has become clearly noticeable and rules the pond. By the 39th day, the amount of duckweed suffocates any remaining life in the pond. We are at day 38, or the 11th hour. The average length of the long term debt cycle is 75 years so the current situation of fiat debasement can continue for yet a few more years before the sovereign debt bubble blows apart.

"Here is a thought: the market bottomed as the economy closed. Does it top as the economy reopens?"

bulls are still in control                         

60 Minutes: Jerome Powell 60 Minutes Excerpt

60 Minutes Excerpt
Jerome Powell (Federal Reserve Chairman)
Scott Pelley (60 Minutes)

PELLEY: Do you think history will look back on this time and call this the Second Great Depression?

POWELL: No, I don't. I don't think that's a likely outcome at all. There're some very fundamental differences. The first is that the cause here-- we had a very healthy economy two months ago. And this is an outside event, it is a natural disaster, in effect. And that's one big difference. In the '20s when the Depression, well, when the crash happened and all that, the financial system really failed. Here, our financial system is strong has been able to withstand this. And we spent ten years strengthening it after the last crisis. So that's a big difference. In addition, the last thing I'll say is that the government response in the '30s, the central banks were trying to raise interest rates to keep us on the gold standard all around the world. Exactly the opposite of what needed to be done. 

In this case, you have governments around the world and central banks around the world responding with great force and very quickly. And staying at it. So I think all of those things point to what will be -- it's going to be a very sharp downturn. It should be a much shorter downturn than you would associate with the 1930s.
... 
PELLEY: In terms of the workforce, Mr. Chairman, who is getting hurt the worst by this downturn?

POWELL: The people who're getting hurt the worst are the most recently hired, the lowest paid people. It's women to an extraordinary extent. We're actually releasing a report tomorrow that shows that, of the people who were working in February who were making less than $40,000 per year, almost 40% have lost their jobs in the last month or so. Extraordinary statistic. So that's who's really bearing the brunt of this. 

PELLEY: The people who can afford it the least are being hurt the worst? 

POWELL: That's right
… 
POWELL: So the thing about the Fed is -- the Fed is an institution, it's a great American institution. And it's full of highly capable people, many of whom are now in senior leadership positions, who were here during the financial crisis. So those people have seen what happened in the last serious crisis. And they were here to help. 

So we got together and we thought about things to do. And we just did that around the clock for a period of about four weeks -- of just putting old programs back into play, inventing new programs, intervening in various markets, just to assure that the markets are functioning. 

PELLEY: Fair to say you simply flooded the system with money?

POWELL: Yes. We did. That's another way to think about it. We did.

PELLEY: Where does it come from? Do you just print it?

POWELL: We print it digitally. 
...
PELLEY: In terms of size, Mr. Chairman, how does what the Fed is doing right now compare to the unprecedented action it took in 2008? 

POWELL: So the things we're doing now are substantially larger. 
… 
POWELL: ...I will say this. If we keep doing the right things in government, we keep providing support to businesses and to households and to the unemployed, if we do that and if we're thoughtful and careful about how we reopen the economy so that people take these social distancing measures forward and try to do what we can not to have another outbreak -- if we do all those things, then the recovery can begin fairly soon. And it can be a robust one. It probably will take some time to gather momentum, but we can get into a recovery. And that's the main thing, is to get into a recovery and then do the things we need to do to keep it going and get people back to work.
…
PELLEY: What we're seeing is the federal government borrowing trillions, upon trillions of dollars to try to dig us out of this hole. How long can that go on?

POWELL: Well, if you take a longer perspective, the U.S. has been spending more than it's been taking in for some time. And that's something we're going to have to deal with. The time to deal with that, the time to get on a sustainable fiscal path, which really just means that the economy is growing faster than the debt, and that means you've got to control the growth of the debt -- the time to do that is when the economy is strong. When unemployment is low, when economic activity is high, that's when you deal with that problem. This is not the time to prioritize that concern. 

 The United States is the world's reserve currency. The dollar is the world's reserve currency. And we have the ability to borrow at low rates. We have the ability to service that debt. And I would say this is the time when we can use that strength to our longer run benefit. It is true that deficits are going to be big for a couple of years here. And that we'll have to deal with that. The time to deal with that though is when we're through this recovery. 

Again, this is an economic shock that's different and bigger than any in our lifetime. But it's not from inside the economy. It's from outside the economy. And so it doesn't say anything bad about our economy. We can get back to a healthy economy fairly quickly. And the spending that we're doing to support people and businesses will help us do that.
…
PELLEY: What is the danger to the budgets of states and local governments? 

POWELL: State and local governments are seeing much lower tax revenue and fee revenue. Many of them get fees from things like transit fees, which have to do with airports and mass transit and things like that. So they're seeing a sharp decline in revenue.

 There's quite a lot of budget pressure there. And state and local governments provide many of the critical services that people rely on. Safety -- public safety, fire, police, things like that. So it's a tough time in state and local governments. So that's one of the reasons why we've created a facility to lend money to them, to get them through this period of low revenue.
…
PELLEY: In the early days of the crisis in this boardroom, you and the committee lowered interest rates essentially to zero. Would you lower them further into negative territory, which the president has suggested is a good idea?

POWELL: So around this table during the last crisis and during the recovery, we looked at negative interest rates. And it's something we decided not to do. We used other tools instead. And those tools involved forward guidance about the federal funds rate and also lots of asset purchases or quantitative easing as it's often referred to.

I continue to think, and my colleagues on the Federal Open Market Committee continue to think that negative interest rates is probably not an appropriate or useful policy for us here in the United States.

PELLEY: And why not? The President seems to think it would help.

POWELL: The evidence on whether it helps is quite mixed. And the issue is people would be depositing money in the bank and that money would be shrinking. They'd be paying interest to put their money in the bank. So it's not a particularly popular policy, as you can imagine.

 But in addition, it can also tend to depress the profitability of banks, which makes them likely to lend less, which weighs on economic growth. So I would just say it's not at all settled in, you know, in economic analysis that negative rates really add much value.

PELLEY: I think the idea of negative interest rates is something that a lot of people have a difficult time getting their head around. Would you explain it to me?

POWELL: Well, rather than being paid interest on your cash, you pay interest to the bank -- or if you borrow money, they pay you to borrow money. And if you lend them money by putting it in a bank, then they pay you money.

PELLEY: So the banks would pay people to borrow money, essentially?

POWELL: Yes.

PELLEY: And that would conceivably cause more business and commerce to happen?

POWELL: It would. But, you know, this has been tried. We have negative policy rates in many countries around the world as a result of the financial crisis. And there's no clear finding that it actually does support economic activity on net. And it introduces distortions into the financial system, which I think offset that.

There're plenty of people who think negative interest rates are a good policy. But we don't really think so at the Federal Reserve. And I think it's an area of real uncertainty in the central banking world.
…
PELLEY: If the economy reopens and the infection rate surges, what then?

POWELL: Well, the risk would be that you would have to reintroduce, the government would have to reintroduce, the social distancing measures. And that you would have another downturn. And that would be bad for confidence. So that's a risk we really want to avoid. And I think we can avoid. 
…
PELLEY: Has the Fed done all it can do?

 POWELL: Well, there's a lot more we can do. We've done what we can as we go. But I will say that we're not out of ammunition by a long shot. No, there's really no limit to what we can do with these lending programs that we have. So there's a lot more we can do to support the economy, and we're committed to doing everything we can as long as we need to.

PELLEY: What would the Fed's next steps be, potentially?

POWELL: Well, to begin, the one thing we can certainly do is we can enlarge our existing lending programs. We can start new lending programs if need be. We can do that. There are things we can do in monetary policy. There are a number of dimensions where we can move to make policy even more accommodative. Through forward guidance, we can change our asset purchase strategy. There are just a lot of things that we can do.

SPY is at resistance and overall looking positive and poised to go higher to the next target which is March 3rd. high, the start of March climax sell off, but there is always something to worry about, like what is going to happen with China and what they're contemplating with Hong Kong.

"When I was a young man I had all the boldness to be a great trader, but was lacking in skill, tools and talents, yet I made some pretty serious money at this trading stuff. Now as an older man with skills, talents and tools, I find the easy money is more difficult to come by. Boldness usually trumps brilliance is the best answer I have to this."

Do we have a reason to rally ?

Going sideways in a trading range for a month means that the bulls and bears are balanced. At this point it's 50/50. There is a 50% chance we go up first and test 200-dma. There is also 50% chance that the move down is already underway.

If we get a good size bull day tomorrow, the odds will switch back in favor of the bulls.

Market history.

                                                   click on the image