Risk/reward for Shorts growing poor, and Low likely by end of August

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The chart in this report is only accessible to members

US Equity markets likely have another 1-2 weeks of possible losses before a meaningful low;  A bottoming post Jackson Hole makes sense from a timing standpoint that could line up with exhaustion signals for Treasuries and Equities.

Friday brought about a Treasury rally which coincided with SPX trying to bottom out merely 5 points above the 4330 level listed yesterday.  Overall, I don’t think Equities have bottomed yet.  Rallies Monday/Tuesday on any additional pullback in yields likely could fail and give way to another decline which has support near 4300-4330 and QQQ levels near 349.

4300-4330 stands out as the most probable area for SPX to bottom in the short-run.  This lines up with Fibonacci and 50% retracement targets from the May-July rally along with Gann-based targets from the 7/27 peak.  Under 4300, while not expected, would cause a brief but severe move to 4200, which is the 50% retracement area of the entire rally off March lows and quite important.

Breadth was actually pretty flat for August expiration, and six sectors out of 11 experienced gains, with Technology coming in largely unchanged on the session.  Key gaining sectors were Energy,...
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