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DeMark hourly SPY-0.19%  chart shows that within 3-4 hours this morning, SPY could likely face exhaustion on this rally which would gel with the current TD Sell Setup shown on 240-minute timeframe on the same SPY chart. Overall, this sets up for short-term peaking by Friday in both SPY and also Treasuries, and a possible low in the Dollar while the broader trend in Equities has begun to broaden out.

Equal-weighted S&P 500 has now outperformed SPX for the last 2 weeks, but now looks to be at an interesting crossroads of resistance which might prove important heading into next week See the relative chart of RSP0.12%  to SPY-0.19%  below

Markets are selling off on ‘WWIII’ worries as Putin discusses authorization of nuclear weapons

• VIX is up to 16
• But as shown below, below 23 seen weeks ago

Tells me stocks over-reacting to headlines since VIX-0.02%  low. Meaning, investors likely buy this dip. IWM0.37%  QQQ-0.45%  SPY-0.19%  BTC

Today's follow-through has brought SPY-0.19%  up to near July and Aug highs (JULY representing All-time Highs) while QQQ is a bit shy of Aug peaks and well off July highs which lie near 503.52 (currently 474.80) SPY is going to have initial resistance near 565 which could happen into early next week- I suspect the rally from early Sept is carving out 5 waves higher, which will require some backing and filling.. a push up to 565, then likely a 38-50% retracement (which might happen POST FOMC) before the start of a larger rally. Much of this will depend on the trajectory of the next few trading days, but trends are UP and the ability to get above 565 would cause a much larger rally at a time when many don't expect it. For now, SPY at 561.6 should have a bit more upside before some stalling out

While the next 8 weeks will be challenging, the highest probability is the August lows hold

• S&P 500 5,100 was 8/5 low
• Since 1928, during election years, August is most common low (44%)
• The October lows (election years) happen during recessions 2000, 2008 and 1992 (growth recession)

Keep in mind, Mark Newton sees a near-term push towards S&P 500 5,700 SPY-0.19%

8 Straight days of gains and SPX is now within 1% of new all-time highs. Last week's relative strength in Technology, Discretionary, Financials proved to be strong outperformers. I am expecting a continued rally into Friday's Jackson hole FOMC meeting, and i DO expect both SPY and QQQ-0.45%  to reach all-time highs. At that point, i'll address my thoughts on Sept-Nov and what kind of pullback can happen. For now, trends and momentum remain strong near-term and it's been a very constructive bounce back for Equities along with Treasuries and Gold- 240 min Chart of SPY below. Further gains to SPY-0.19%  565-8 look likely, then a stalling out.

At 2pm ET the FOMC will announce its interest rate decision and at 2:30p ET today, the press conference starts.

• the key is the Fed decision itself is clarity (no surprises expected, no cut today)
• equity markets have stalled waiting for "clarity"
• thus, we expect a substantial rally to start post-FOMC and last a week or two
• Mark Newton, Head of Technical Strategy, also sees high probability of this

Bottom line: Buy IWM0.37%  SPY-0.19%  QQQ-0.45%  or any combo. But we expect this to be led by small-caps. Hence, "summer of small caps" intact

The drop in US 10-year yields this week from 4.4% to 4.2% is a very good thing:

• this is an outright easing of financial conditions
• even if Fed make a "hawkish" pause Wednesday
• doesn’t matter if this drop in yields is due to "flight to safety" as France elections cause turmoil

Buy the dip. SPY-0.19%  IWM0.37%

More encouraging economic data today:

• jobless claims up = good (softer labor)
• PPI downside reading = good
• PPI reading affirms good CPI

we still view stocks as buyable here. Strong into month end SPY-0.19%  IWM0.37%  QQQ-0.45%

Some Early gains out of Equities this am to kick off the new week. Important to see a bit more progress off the lows to think that any sort of bottom is yet in place. While Sentiment has turned more negative of late (AAII now largely flat after last week's readings) and Breadth has gotten compressed ( 20-day m.a.), there remains no official exhaustion per Demark indicators and after such a vicious short-term decline in short period of time, that's thought to be important towards helping markets stabilize after six straight down days and a particularly large high to low range last Friday. Short-term cycles say a low should be imminent, but ^SPX-0.19%  hasn't even eclipsed last Friday's highs yet. DeMark TD Buy setups would be in place on any move back under Friday's lows (Under 493.87-SPY-0.19%  ) and under 4953.87 in SPX would help TD BUY Setup to appear and also intra-day buys on SPX on 60, 120 and 240 min. My thinking is this should materialize between now and Wednesday of this week. So for today, getting back OVER 5019.02 would be a positive on a closing basis, while also under 4953.56 would be important. For now, a +0.50% gain puts SPX in No-Man's land and tough to make much of this, thus far, but markets are close to bottoming, we just need proof