Darn it all, we had to get overbought just when the market bulls got all of the momentum. OK, plus 3.4% on the S & P 500 Short Range Oscillator , which I have trusted for decades during volatile times, is not the end of the world. But this market is susceptible to downturns whenever we get to plus 5% and the downturns hit the megacaps stocks right in the kisser each time. Will it happen again? Historically, I am not a huge September fan. You could normally expect it to be great on paper.
So my take is that we have to be very careful here. The march to 5% on the 20-year yield, if measured, will not cause a rupture — my term having just had a triple hernia operation — because we will be salivating over the coming Fed easing cycle. But if we get a whip to 5% in September, we just get earnings cuts ahead of October reports — and that, ladies and gentlemen, is what could make September a very difficult month indeed.