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Fear is the hallmark of this market. Institutional fund managers are fearful that they’ll miss a rally, while bears believe that there’s something in the future that Mr. Market senses is wrong.

To the latter, what is it? We don’t know. It could be a financial failure or crisis, more geopolitical tensions, stagflation, hurricanes, the Fed and so forth. Currently investors may just be sitting on their hands waiting for the Fed’s interest rate policy decision. Rumors are swirling that the Fed may raise interest rates 50 basis points and then pause. If they did, then they’re trapped to raising again by the same amount should they resume increases. The bottom line is the longer we can move sideways, the next major move up or down will have more meaning and staying power.

On Monday the markets fell substantially, disappointing those who felt Thursday’s sharp rally was a bottom. Tuesday's equity markets hardly budged and volume was summertime light, which is more evidence that investors are “waiting”. So are we. The following are the charts that matter to us:

Source: Fear Is Defining This Market (SPY, QQQQ)