Prolonged debate  about the worthiness of buying or selling most stocks at this levels, continue to drone-on among pundits. Most have variable views as well as unusually tempered optimism even among institutional analysts, either because they missed the upside move from mid-June forward, or they really believe the Fed will maintain it's anti-inflation fight, for the time being.

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A few technicians simplify matters in a way similar to our view, which is that it doesn't matter if it's the Fed or not, it's extended, it got to the 200-Day Moving Average of S&P, as you know that's a decent reference for upside exhaustion or at least consolidation. Personally I am suspicious the market has oomph to muscle it's way above yesterdays high even though it should sell-off more as well as subsequently have some sort of bounce. 

By the way, aside the short-squeeze notables, I don't see 'sunshine bulls' of a great quantity. I do see hedge funds that are trying to make up for missing the past move, but even the optimists don't sound very complacent just for now. It might even set-stage for a pre-holiday rebound as even nominally-consistent bulls are thrilled it seems to see any kind of setback. Just a bit 'formulaic'.  

Notably the 'fun & games' stage occurred with the Meme stocks, and much of that not only occurs near the short-term end of upward frenzies, but occurring in stocks like Bed Bath & Beyond (BBBY)  is a bit nuts, since they're closing stores in a few locations. So even if consolidated ones work out, the value is nuts. It's a rare moment that I'd concur with suggesting a CEO use the rally to float some sort of offering while the shares are up, but this was that. However selling that is now evident probably puts a halt to the artificial levitation of that stock. 

After the close Target (TGT) reported poor results and got hammered, more Retail pressure which isn't a surprise and arguing that the excess inventory merely prepares them for the Holiday season, well, that's a pretty good early spin but insufficient to hold the shares up. We've seen a lot of spin going on, and there is still no evidence about 'how' China will deal with Apple (aapl) shifting production of key products to Vietnam, or back to the US. If not for Apple, the S&P would have cratered by now, as I've pointed-out in a way Apple 'is' the market. They will (by the way) introduce iPhone 14 apparently on September 7. 

If there was one stock we follow that has favorable implications for another, it might be Wolfspeed (WOLF), which had a great quarter, also expects growing SiC demand (Silicon Carbide which is essential in better EV's) and has a unit for testing 'wafers' from AEHR Test Systems. As that's apparently a demo/loaner it might be just about time for WOLF to spring to signing a contract, after the lead customer (we believe ON Semi) of AEHR (AEHR) is ordering more supplies.  

For these stocks the short-term is dicey everywhere, but special situations tend to stand out. For-instance, we don't embrace the 'sell it all' mantra because for major stocks it's not really a revolving door, and one tends to pare-off portions after a stock advanced, especially if it's been moving for a prolong time with a reasonable correction missing. Some say that about Apple now. It sort of true but Apple did correct earlier in the year, although we are a bit skeptical for the immediate term. Because some technicians will look at a series of lower tops (a megaphone pattern) they might say sell now, and we'd not disagree with a portion, but not mass decision.

Why? Sort of like S&P fighting the 200 DMA, it might get a bunch of sellers on the short side, and then get run-in, then AAPL actually has a sell-off. Another aspect is my favorite phrase about a stock that doubles or more: 'sell half and hope you're wrong'. This might be such a time, although I wouldn't be stunned at all to see a nominal pullback followed by an all-time high, then it declines. 

In-sum: 

There's not a lot of oxygen above current levels, but without being too cute, recognize that the precise repelling of S&P from the declining tops (we showed on the weekend and at the bottom of this Daily again), invites recoil, or in this case a boomerang taking S&P up to test the week's earlier peak. It's unlikely at the moment, but between now and the Holiday weekend it could be a consideration, given the broad negativity that surrounds most assessments.

At the same time so much depends on Oil prices, not so much Fed behavior at the moment, which the somewhat doctrinaire FOMC Minutes suggested (a nod to data dependency, but they won't say Oil and Dollar really command). I by the way still believe the drought impedes ideas of meaningfully lower food costs, and actually is a domestic 'exogenous' event of historic importance. 

The Fed is going to discover that they 'can' break Housing with rate hikes as I forecast, but they can't claw back wages or influence Oil price swings much in terms of monetary policy. If they trigger a financial 'event', that would be them.

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