Consolidation around 'support' near S&P 3900 characterized Wednesday, after a brutal day of algo-driven liquidations. This kind of ensuing behavior is a typical follow-on, and it doesn't mean prices have bottomed for long, baring of course some dramatically favorable development (such as Putin resigning). 

It is not a level for money managers to find particularly attractive 'values', that might be a view some hold, however it's likely premature for reasons outlined previously, and there's not enough compelling to bring in serious new buying.

Recession (double dip as I've suggested for some time) should impact more of America's consumers this Fall, as the era of monetary policies lifting boats all over the seas, is done. If anything look at Europe and Asia, where demand for Oil is down even as countries worry about Winter supplies, because there is lower industrial activity and still lock-ups related to COVID (mostly in China).

The key factors on a very short-term still relate to Expiration coming now, and trepidation's about earnings outlook revisions ahead, and of course the FOMC that already telegraphed their direction (Funds rate over 4% conceivably even getting towards 5% 'if' we don't get an economic 'bust' sooner that forces their hand to pivot earlier than they plan...for instance). 

Also, because you have earnings reporting, you enter quiet periods for about half the S&P stocks, so those that had buying plans won't generally see them active during this time. Basically I'm not particularly bearish based on these or other events, but looking for any significant upside for now is mostly fantasy. 

Some economists believe we're only in the 'beginning stages' of fighting this inflation battle, and while I think the Fed has somewhat misjudged the causal factors of the inflation (they hesitate to blame themselves or excess stimulus), they are likely to forget ahead unless there is a 'real' crash that interrupts the campaign. My concern is this is prolonged as I've often mentioned, because a lot of the inflation was Oil prices. (Now much lower after resistance noted near 120/bbl, with support looked for around 80 and we have that price support too by virtue of the Administration's new commitment to fill the SPR back ~80.) 

In-sum: 

This is all fluid, without resolution, and with technicals stalling along the way presumably to lower S&P levels. ~3600-3800 seems reasonable but is unlikely a stopping point for long, if something's not better in the interim.

The economic data will be pretty sloppy going forward, barring resolution to a seriously sluggish situation in the UK, the entire EU and also China. Japan is contemplating 'intervention' to support the Yen, and that reflects dismay over the Dollar's strength. Analysts here in the USA aren't generally very focused on the amount of business the multinationals do abroad, but should be. In my view there's no way to command a higher S&P multiple purely based on more limited domestic business, although a few companies will be exceptions.

Bottom-line:

There's no change in the pattern evolution, as S&P bounced off the somewhat key ~3900 area, with no real prospects of it being defendable in the overall picture. Immediate reactions are debatable because Expiration is basically 'now', and next week's FOMC meeting is on the docket. Tomorrow also gets New York's Empire State Index, all of which increase market angst.

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