Clarity is absent - from this market in so many ways, not the least of which is the forthcoming response to continued high Oil prices, a firm Dollar, struggles with Russia, Iran and even some debate about whether the Washington saga will impact prospects (and economic impact) from political policies ahead.

Pixabay

What might be said is that we've had a 'recession', almost Depression for the smaller stocks and certainly for the 'theme' stocks of the prior pandemic. With nothing but a caveat about the 'next-generation' vaccine coming, and a series of hints about COVID having yet-another wave ahead (maybe now per a friend well-positioned to know what's happening at major hotels to staff and guests in various countries), there's even that unknown to toss-into the mix.

It's not necessary to focus much on this, but maybe that's part of what you're seeing just now, as the Quarter is wrapped up. I hoped for better behavior for these last couple days, but we don't have it and that suggests traders and the bulk of money managers remained concerned about the road ahead in Q3.

Sentiment is getting sour pretty rapidly, which also means if the economy will follow that, you'll see an odd reaction with 'data' that looks bad, perhaps well received by markets, if it implies the Fed will back-off hawkishness sooner.

Of course that's a stretch for now, but ultimately actually happens, even as I'm pretty sure this Fed intends to carry forth based on what they know so far. Oh, this morning I intently listened to Fed Chairman Powell, the BIS head and the Head of the Bank of England, as well as ECB's Christine Lagarde. They were in a World Monetary Forum in Portugal, and didn't deviate from assumptions about policy and the actions that continue until inflation breaks.. somehow.

Again, that's why anything suggesting an early break of inflation would help. I would rather it was from 'peace' in Ukraine rather than low oil supplies from a rising demand, or conversely any of this creating demand destruction. But for now we have low stocks of Oil (Cushing) and perhaps a failing Iran nuke deal.

Suffice to say there's a concern that's deepening the negative mood on Wall Street, which can mean being near a low but in this case more likely is their grappling with heaviness, or 'Dog Days of Summer', which still lie ahead.