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Despite Tuesday’s strong surge, hourly overbought conditions when weekly momentum is negative don’t normally represent the ideal time to chase a three-day rally.  While I am bullish for SPX gains in September, it looks like a poor risk/reward in the short run heading into a very busy end of the month. 

My bottom line thoughts haven’t changed.  “While I suspected a low was close, I cannot yet confirm that it’s “The Low”.  Moreover, it’s still tough to rule out weakness over the next week”.  However, it’s thought that pullbacks will make SPX and QQQ attractive before kicking off a stronger rally.

US Treasury yields plunged down to initial support on Tuesday’s JOLTS data.  The question most investors have is whether this recent pullback in yields can continue.  While I expect further intermediate-term weakness in yields into next Summer, 2024, Friday’s Jobs report will need to also come in weak and join JOLTS to help TNX undercut 4.0%. 

Thus, weak economic news has led stocks higher over the last week.  However, I’m uncertain that this trend continues uninterrupted.   The next 3-5 trading days will be very important in this regard....

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