Financial conditions easing slightly, along with plenty of liquidity in fixed income as well as flight capital buying Dollar-denominated assets, has helped what some call an S&P 'slow melt-up'. I call it a grind challenging the 200 Day Moving Average, which will have bears flummoxed if S&P gets through it. 

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September is almost always a tricky market, and this year can be especially a challenge, because you have a Fed meeting, possibly decisive time in the war as Ukraine tries to recover captured territory before the coming Winter, and in the midst of all that there will be awareness of a lower 'pace' of inflation. 

The S&P partially 'ramped higher' as odds of being in a 'new' recession faded. That doesn't mean we should dismiss growth concerns looking forward, while it also doesn't mean so many analysts should dismiss the June low being the intermediate bottom we identified and described again yesterday. It's unclear in a sense for the weeks ahead, but we projected turbulence returning. 

It's important to realize that 'presuming' we get a September shakeout, we will see the technical and hedge crowd crowing about how negative things are, as the mainstream institutions will welcome a pullback since they mostly missed getting in during the May-June purge setting-up our entry area. So this 'battle' is likely to persist and a set-back will look the same regardless of outcome. 

In-sum: 

There are probably earnings downgrades yet to come, there are the geopolitical issues that transcend politics and impact markets, such as what might happen vis-a-vis China, and the technical rebuff that we've looked for. 

Technical conditions did tighten up, and needed too months earlier as warned here last year, and which promoted too much upside in S&P and necessitated a purge (initially under-cover provided by a handful of 'Generals' while troops remain hunkered-down in the trenches. Now both came out of the foxholes to see what they could do since our June low, and are now confronting 'enemy' resistance about where expected, around the S&P 200-Day Moving Average.

It's reasonable and responsible to allow for retrenching around here, and as far as Tuesday was concerned, it was down-up-down as S&P broke a bit after popping the highs slightly. That was a blend of alternatives noted last night. 

So, 'thrills or chills' shouldn't be the debate for the next few weeks, as either way it goes (likely consolidates at minimum, open for an 'event-related' event splatter too).. either way won't answer much (as yet) about 2023. Actually any reasonable retracement would take the edge off near-term overbought S&P or NDX conditions, and probably enhance the upside prospects 'down the road'.

You have a majority of stocks above their 50-Day Moving Averages, and that's about 90% of the S&P. So that's a 'positive divergence' and supports the idea of 2023 being a decent year for investors, providing no exogenous event spoils the prospect. Nevertheless my concern about the next few weeks shall persist, and I differentiate that from the bears primarily because I don't believe the move from June was a bear market rally, but rather an intermediate low of the preceding S&P peak, which trailed (masked) a complex preceding broad market distribution, which is why I had to separate the bifurcated aspects. It's also why things 'now' are better aligned for possible concurrent 2023 upside. 

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