Emergence not submersion is what we've been talking about. Although nothing is certain, and the bond market became quite dovish, the divergence gives rise to skepticism, and that pushes S&P higher as regularly noted.

Pixabay

Now we will challenge the 200 Day Moving Average this week, and yes have another chance to battle resistance. Expect a contentious battle to ensue.

In our view S&P is 'high enough', but can fiddle around the 200-Day Moving Average for a day or two, or it might pop the level and try to roll-over. 

There is no change in expectations for choppy turbulence as we get into the early Fall, and of course the heart of hurricane season is immediately ahead to contend with, which may impact Oil prices if a storm hits in the Gulf (as is fairly likely), and the way Washington is, because that would temporarily rally Oil or even retail gasoline, the Fed might try to view that as justifying even higher rates. I am being slightly cynical, but the combination could also impact the S&P. 

In-sum: 

It's a struggle that has both Bull & Bear alike skeptical, nobody considers everything earlier was a launching pad for upside later in the year and into 2023.

In my view this continues for awhile. The distinction between a market rising, while a shuffling economy 'in some ways' sags, is also under-appreciated by a lot of managers. Discounting an 'eventual' next phase of recovery is ongoing, at the same time the key Index stocks of course get ahead of themselves for a time. That's part of why you have the debates about duration of the move. 

Bottom-line: 

Barring a forceful 'black swan' or absurdly dramatic Fed action, or military calamity, things are lots more benign than the bears make it sound, and not yet bullishly ebullient. The heat wave and drought 'alone' without help from the Fed, will keep things testy and prices high (and some foods scarce).

By no means are we dismissing risk for the weeks ahead, just stratifying what we see as an actual situation, which generally lines-up with my call for 'softish not soft', and not exactly late cycle as economists say, but almost early cycle in some ways, and that is confounding market analysts. And short-term, that's a real conundrum for those that missed our June lows, because S&P now is extended short-term, but not so much long term, 'if' we get the 'softish' saga.

At the same time the answer to that won't be clear for some time (seasonal and technical factors will loom and possibly assert themselves), but what is clear is that the idea of distributing last year and buying somewhat in June, while avoiding too much negativity, was apparently the proper stance to take.  

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Market Briefing For Monday, Aug. 15
Market Briefing For Thursday, Aug. 11
Market Briefing For Wednesday, Aug. 10