Sometimes it's what's not said that garners attention. My wife certainly knows this, as all she needs to do is stare at, in complete silence, the unchecked "honey do list" that we have sitting on the kitchen counter to get me moving on things. Markets also know how to respond to silence, as was displayed in the wake of Wednesday's afternoon release of the July Fed minutes.
Specifically, the minutes had no mention of extending the duration of asset purchases, which was a storyline that had been pushed heading into the meeting. Also influencing the market's swift response was the fact that the Fed appeared to cool substantially on any imminent implementation of yield curve control.
As of this 11 am ET writing, post-minutes equity selling has not extended below our ST Noise Buffer at SPX 3349.7. Should this welcome corrective response to elevated bullish sentiment and tiring momentum extend below this Buffer in the coming days, however, a noteworthy support confluence rests 2.4% below Tuesday's all-time high close, near 3309.
Tactically, though, it would be anomalous to see such a decline materialize by 08/25. Specifically, the max drawdown in the 5 days following an all-time closing SPX high after a correction of > 20% is just-2.0% in 1982. Interestingly, there were 3 other drawdown events that nearly matched that (-1.9% in 2013, -1.9% in 1972, -1.9% in 1967).
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