Headline Risk Continues to Rule e-SPZ Direction... But...

The most salient feature of the enclosed 4-hour chart is that while the e-SPZ (e-mini S&P 500) has recovered all of its overnight loss, and has climbed marginally above Friday's high, my 4-hour momentum gauge is not confirming the new high recovery in price.

This does not mean the e-SPZ is in immediate danger of reversing back into weakness, but it does suggest to me that in the absence of a deal announced later today before the close, the index will be vulnerable to a nasty sell-off that could and should press it towards a test of key near-term support at 1685/80.

Should the best of all outcomes emerge (whatever that means), then the e-SPZ must climb above 1711 to trigger renewed "melt-up" potential that makes a direct run at the Sept 19 "no taper" high at 1726.75.

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