Let's review.
With the SPX at 3900 on July 7th:
SPX closed July at 4130.
Then on July 27th with the SPX at 4000:
SPX hit a high of 4325 this week, falling 25 points short of the lower end of the target for August.
However, I must say, this is the first week in quite awhile where the price action deviated significantly from what I expected. This has some significance.
My initial takeaway is that I have underestimated the bearishness that remains in the market.
More specifically, going into Powell at Jackson Hole later this week, investors are taking the same line as they did going into the late July Fed meeting.
They sold into the late July Fed meeting as paranoia and terror continue to reign supreme after the massive display of wealth destruction during the first half of 2022.
Something else I may have missed that was a significant AHA! moment this past week was that the past two Septembers the market sold off significantly after rallying through August.
A weak September has become programmed into the mental framework of price action models.
We have just seen some front running taking place of BOTH Powell this coming week and perceived September weakness.
The fact that investors feel the need to front run to the perceived downside of Powell remaining hawkish or not being dovish enough tells you just how jaded investors have become of the Fed.
The fact that investors think that with this level of bearish sentiment, the markets will simply be a replay of the past two Septembers tells you the preprogramming of investors taking place in 2022 is highly exploitable.
I expect the market to continue to take advantage of this persistent bearish mental framework all the way to new highs for all the major market averages.
So, yes...something did happen on the way to S&P 4400.
As a result, the September target becomes 4500+.
Packed week. Let's go.
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