Enthusiasm is slowly turning to anguish as the US stock market is barely able to hold gains.
Sellers have thrashed the wave of buying at the open and an 18 point gain has withered to 4 points. When a rally teeters that far, it usually tips into negative territory. If we end in negative territory, it throws up a hefty sell signal on the chart and reminds everyone that September is the worst month of the year for the S&P 500.
S&P 500 daily chart
There will be talk that the upbeat manufacturing data sparked worry about the taper but I think it’s more paring risk ahead of a volatile month. Better to book some profits now than risk it all on a Fed communication blunder.
