Credit-risks are/could put more strains on regional banks and so on, as well as consumer liquidity and commercial delinquencies as September and October activity evolves. We know that. So does everyone else, which is why the short-side of the ledger was overly crowded, allowing this forecast S&P 500 thrust higher, which has actually broadened-out reasonably impressively, for now.

Freepik

There's no change in our basic assessment of this market, of yield concerns and serious pricing levels that retard spending, suppressing many people in their ability to maintain lifestyles, and well, maybe real estate prices in Florida will collapse after this storm (besides the insurance coverage mess), however it hasn't so far, although Miami's absurdity (becoming a 3rd world city with the vast gap between rich and poor and limited middle class) helps those property prices or activity further North in Florida, especially where not in flood planes. (I just last month increased my own flood insurance, it kicks in today, isn't that special...hah.. coincidental but a bit of calming.. I'm 20' from a flood zone as I learned, and the flood maps the Nat'l. Flood Insurance uses are dated.. ).

Market 'X'-ray: 

Upward price behavior projected for this pre-Labor-Day week persists. Importantly S&P managed to surmount its 200-Day Moving Average.

While I believed this would be primarily short-covering due to excessive ETF shorting and common stock Put buying, it's welcomed to persist, but wouldn't get too excited about that past this week and perhaps an extension try after.

On the doorstep of new highs...amazing. So much negativity. At least we saw that and run-away yields choking off growth but looked at the heavy shorts to conclude...the S&P was going to go up for now, not down.

It's impossible to say we've made any sort of impressive effort to overcome a slew of obstacles, as we never washed out the market very dramatically, but on the other hand that was last year, when they crashed most everything but the mega-caps.

The market might want to see more growth and earnings and not an unfolding 'credit crunch', which really is the risk over the next couple months. So, while formal data denies the imploding labor market, and ability of the economy sort of 'absorbing' or dealing-with high rates, Consumer Confidence disputes that, and also anticipates more inflation. So most people don't believe formal data.

Bottom-line: 

Pretty resilient market and Jobs report pending later this week. S&P managed to close above the 50-Day Moving Average resistance, and I'm glad to see that, but it doesn't make me particularly more confidence about all the action in September and October. I think we have a bit more rallying now.

More By This Author: