W Formation Wednesday – Waiting on the Fed

We are forming right up into that "W" pattern we expected.

Can it really be this easy?  Just a little dip into the Fed's Jackson Hole conference on Friday and then Uncle Ben says the magic words and we're back off to the races despite the concerns about – well, EVERYTHING… 

Indexes in Asia are NOT pretty on the Japan downgrade, with the Hang Seng dropping 408 points (2%) to 19,466, only saved by the bell on a very harsh rejection at 20,000.

Shanghai was only off 0.5% but it was a big drop after lunch, also finishing at the day's low.  China Life (LFC) had terrible earnings, falling 12% on the Hang Seng.     The Nikkei finished down "just" 1.1%,not so bad after the debt rating cut.  Exporters got whacked with TM down 1.6% and SNE down 2.9%.  India fell 0.9%. 

"The readings are not wildly positive, but a lot of the bears have been suggesting that the economy is falling off a cliff…These numbers just do not support that idea," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

Europe seems unfazed by all this and is up 1.3% in Germany (go EWG!), 1.1% on the CAC and now the FTSE is getting lazy at 0.25%.  EU Factory orders fell in June (we need to give up on June and July and look for Aug data) and German Business Confidence hit a 14-month low and that is August data!  The EU is also scaling back their defense spending.  We currently spend 6.66% of our GDP on Defense, the rest of NATO spends an average of 1.7% and they think it's too much.  …