Trading range action continues as the market awaits news from the Jackson Hole event that starts Thursday when the Federal Reserve convenes for its annual economic policy symposium.
The bears grabbed the advantage Tuesday as talk about cutting payroll taxes caused some worries about economic slowing. Wednesday, however, strong reports in the retail sector and from Target (TGT) , in particular, put the bulls back in control.
There was some minor reaction to the Fed minutes from the last meeting in the afternoon, but that is old news and didn't really provide any new insight. The indexes stayed relatively flat following the gap-up open. Breadth was good with around 5,200 gainers to 2,075 decliners. New 12-month highs expanded to over 225.
It was solid action, but the S&P 500 remains under its 50-day simple moving average and is in a trading range. This will be an interesting setup into the speech by Fed Chief Jerome Powell at Jackson Hole on Friday morning. The yield curve briefly inverted again this afternoon, which is an indication that there is some nervousness about what Powell might have to say.
The action tomorrow will help us develop some strategy for the news on Friday. Currently, market players seem optimistic that the Fed will continue to provide good support, but Powell has a history of generating negative reactions.
There has been some good trading in individual stocks. The retail sector doesn't typically act as a leader, but it did so Wednesday and that helped to keep sentiment positive. It is still thin August trading, but this market has been far from dull.
Have a good evening. I'll see you tomorrow.