Jackson Hole technical playbook following SPX reversal 

Markets intra-day reversal doesn’t take away from technical thinking that a near-term low is likely in place.  While SPX failed to join QQQ in its downtrend line breakout per Thursday’s close (and DJIA closed at new lows for the week) some positives are in place that suggest a larger bounce lies right around the corner.  

Volatility is back and that likely won’t change heading into one of the most meaningful FOMC meetings this year.  It’s uncertain whether Chairman Powell will allow recent weaker than expected PMI data to influence his thinking about the need for further hikes.  Implied option volatility for Friday’s SPX trading, however, shows a daily range possibility of 0.75% per the options pricing.   

This suggests a possible volatile day, and one that might be rife with whipsaws unless Powell is quite clear and not hesitant about the economy in a reassuring way.  SPX and QQQ both retraced all of the early premarket gains in futures, but by end of Thursday’s trading, prices lie near Wednesday’s lows. 

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