Aug was a “bipolar” month. First, we have a run of near 6% in 12 trading days and later are experiencing a -7.8% in 12 trading days. If today we end up having a flat day the SPX is likely to end up negative for the month and near -16% for the year.
It is complex to interpret the correct explanation of what took the market higher. The same way, that I am not sure of what is taking it down. On the other hand, now it is clear that the FED comment were a turning point for the up movement. Short seller have now a new stop zone at the highs of Aug to based the risk reward. We would need a -7% to make a lower low for the year and near a +7% to take the high of Aug.