On the left hand, the Shanghai Composite is still heading for 2000. It should reach that within 3-4 weeks. This is the time frame for US markets to top out. That's a weird situation -- Sector rotation and Regional rotation. The current strength in the SPX comes mostly from short covering in financials. We have mixed signals in technical and sentiment readings as the Rydex dropped to .615, which is a buy level. The Vix stays below 20, but as we said earlier, expect a test of the 16 level within 4 weeks. Overall, the price action confirms that for most of September, we will have rising US markets. SPX will test the 1325-40 area. We could even test the 200 MA at 1359, which almost matches the downtrend resistance. After the New Moon, we will have some powerful positive astro effects for the next 2-3 weeks deriving from Jupiter, which will create the illusion that things are turning around as inflation readings are retreating and as we had this totally overstated GDP number, which does not match reality at all. Oil keeps struggling to go up, so we even might not get above the 122 for the near term and drop to 100 within the next 2-3 weeks before a more severe upside correction kicks in. The broker quarter end and window dressing effect was stronger than I thought. As a rule, over Labor Day, markets tend to go higher but a small pullback mid next week might create a chance to get into longs, which is shot term the side to be on. It probably will be the last rally for this year.
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