Jitters prevailed ahead of the Kansas City Fed's Jackson Hole conference, at which it's anticipated Chairman Powell with emphasize the 'inflation fight', as well and resulting from a fairly heavy Expiration Friday for a non-Quarterly Expiration, and that's because Options partially contributed to overall upside in the wake of our identified June bottom.

For now, we're open-minded both to a pre-Labor Day rebound (which may or may not surmount the perfectly-touched S&P 200-Day Moving average early in the week just past); as well as a subsequent shakeout in September. That's been my general expectation, although many 'real world' variables could very easily change the prospects, and we'll try to identify any capable of doing so.

The best example of that might be the efforts (interestingly spurred along with the help from Turkey's Erdogan, who wants to see shipping not fighting along his coastline and through the Dardanelles) to try brokering peace or holding a ceasefire around Ukraine ports (especially Odessa), which we indeed thought likely to be secured sufficient just about now, to facilitate feeding the world.

More significantly; we'd like to see steps towards a general 'ceasefire' in what is an incredibly bizarre unnecessary conflict. Rumors of some possibility of at least a meeting between Zelensky and Putin have surfaced again; and if that occurs there can be some relief in a few areas; especially Europe as it worries about Oil and especially Natural Gas prices and supplies for the Fall & Winter.

If you get a 'deal' the edge would come off energy prices; and the recession in the EU would ideally be not so deep as otherwise. That's a concern for Turkey too (perhaps part of Erdogan's motivation to inject his efforts); because their Central Bank just freaked out citizens by cutting interest rates in the face of a very high inflation pace; and that requires 'growth' if Turkey wants to enable people to keep pace. Frankly there's sufficient poverty that it would bifurcate their population into economic strata s even more widely-disparate than now. 

Back on this side of the Atlantic, there's no doubt FOMC monetary discipline dominates concern in the market for the moment; ahead of Jackson Hole. As the credit landscape continues to deteriorate (mortgage lenders to the fore), it becomes useful to tread lightly on decisions related to 'how' heavy Housing will decline, or more likely ramifications from non-big-bank mortgage lenders. 

In sum: hot inflation data in Europe; rumination about Ukraine peace; some unwinding related to the Expiration; and a tentative market worried about Jackson Hole this coming week.

And of course the crosscurrents related to the 'range' we're in, between the two declining tops pattern; and as S&P repels it from the 200-Day Moving Average as expected. What remains is an effort to revive and 'test' that high.

Nothing out of line with our outlined S&P pattern prospects.We got repelling at the200-DMA; and that was the expectation. So, carrying that into the biggest non-Quarterly Expiration isn't surprising. We expect S&P to muddle through the Fed Jackson Hole gathering; and the  extent of weakness or chop during that matters.

Afterwards perhaps we'll get a decent rebound to test-out the recent 200-DMA high; before a broadly expected return of greater risk in September/October. It is a prospect I've discussed thoroughly; so need not expand on it for for now.

Bottom-line: market should be challenged in the new week; given Jackson Hole and of course reactions that follow. S&P choppy and at times defensive; perhaps a relief rally 'after' Chairman Powell remarks reaction.

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