Reasons to Stay Bullish in August and buy any weakness for gains into September

As I am on break next week, there will be no reports and videos.

The early week stabilization in SPX has been encouraging, but technical structure at present remains a work in progress ahead of next week’s important CPI report.  At present, despite this week’s wild cross-asset volatility, it looks correct to favor risk assets for gains into September, despite more progress being needed technically.  As discussed in recent days, I feel that lows are likely in place for now after this sharp decline from mid-July.   Equal-weighted S&P 500 and Equal-weighted QQQ remain in much better shape, following just a scant 3% decline from all-time highs in recent weeks.   US Dollar and US Treasury yields should be ready to turn back lower, SPX should turn up in a more direct fashion after August expiration.   Bottom line, the risk/reward favors a return to growth and Technology bounce after the recent pullback to support. 

We conclude one of the wilder weeks of the year for cross-asset volatility on a high note which included both the best and worst days of price action of the last couple years for Equities along with above-average swings for “FX” and Treasuries.

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