Geopolitics are back in focus on this first trading day of September. North Korea’s push forward with another test on the nuclear front over the weekend caused U.S. Ambassador Nikki Haley to suggest that Kim Jong Un is “begging for war.” And given that South Korea is saying that the North is prepping to launch an intercontinental ballistic missile, the situation appears to be heating up. In response, the U.S. is looking to hit Un’s regime with even tougher sanctions via the U.N. In addition, it will be a busy week of “Fedspeak” with U.S. Federal Reserve officials Lael Brainard, Neel Kashkari, Robert Kaplan, and Bill Dudley (all voting members of the FOMC) slated to speak and the ECB meeting on Thursday. All of which is occurring as we enter what has historically been the weakest month of the calendar.
But before we get carried away with speculation of what might come next, let’s turn our attention to our objective review the key market models and indicators and see where things stand. To review, the primary goal of this weekly exercise is to remove any subjective notions one might have in an effort to stay in line with what “is” happening in the markets. So, let’s get started.
The State of the Trend
We start each week with a look at the “state of the trend.” These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.
Executive Summary: