The S&P 500 took a punch to the gut after Fed Chair Powell promised to get inflation under control at all cost after last week's Fed meeting. Clearly the market did not take well to his tough stance. So where are we? If you take a peak back at our post from July 15th "Market Wind Up", you will see the result of the "wind up" was a major break to the upside - all the way up to the top support zone (two upper dotted blue lines illustrated below) which happened to coincide with the 200 Day Moving average (green line). Well...here we are again - same basic set up, only on a much larger scale. It will be imperative for the market to hold this lower zone in order to even have a glimmer of near term upside hope. If the market cannot hold the lower support zone area (lower two dotted blue lines), which it is currently kissing, then we would assume the market would come down to test the market lows (bottom red dotted line). We are watching these levels very closely, but just know that this will continue to be a very volatile year to both the up and down side.
Unfortunately from a historical perspective, September has been one of the worst months for the market, as institutional managers dump underperforming stocks to position for a year-end rally, so there's that. Anything can happen, so just know that we are watching and will make the moves we feel necessary to navigate these rough waters.