The S&P 500 traced an outside reversal pattern to the downside yesterday. The last instance of such an event occurred on August 1 which preceded a near 16% drop in the blue chip index just six trading sessions later. I suppose this does not instill any confidence in investors going into Ben Bernanke’s highly anticipated Jackson Hole speech, but I will assuage those fearful of another leg down in equities by arguing that the fundamentals will always trump the technicals if the former has enough direct influence on the broader market. Certainly, this morning’s speech qualifies as such an externality.
I am not predicting that whatever spews from the Chairman’s mouth will send stocks soaring, for current mainstream consensus has forecasted a likely sell off. Perhaps, traders already booked