BOB LANG: Good morning, Action Alerts Plus members. It's August 31, 2022. It's time for our rundown. So let's get to it.

So yesterday, we saw the S&P 500 break below 4,000 for the first time in a couple of days, and it stayed below there, and we're currently trading a little bit below there right now. We do see a little bit of a modest rally happening so far today, but still, with that break of 4,000, we do have some lower targets in place right now. We talked about this the other day. That 3,950 on the S&P 500 is a good target to head down towards.

If we can't recover past that, 4,000 level, and even below that, about 3,900 on the S&P 500 could be there. The one headwind for the bears, if you want to call it that, is the fact that the oscillators are extremely oversold right now, and we have a minus 300 reading on the NASDAQ, minus 280 reading on the New York Stock Exchange oscillator. And we often see rallies from those low levels of the oscillator which could happen right out of the blue within a couple of days.

So that's the one headwind that the bears are looking at. But still, the trend is down. The bear market is still alive right now, and we still have to play by the bear playbook going forward.

So again, this big rally that we had up to 4,325, and if we get down to 3,900, that would be about a 50% retracement level from the highs at 4,325, which was when we tagged that 200 day moving average down to the lows in June at 3,640. So it's roughly 3,900 to 3,920. So if we get down there and we bounce off of that level and we're oversold, that would be pretty significant. It would be a good sign for the bulls. But for right now, the trend is still down, and we have to play it that way.

From a deeply oversold condition, though, could we bounce a little bit further up towards up towards 4,070, maybe 4,100? Absolutely. But the damage done to the markets last Friday is very severe, and we followed through on Monday and Tuesday. So again, it's time to use caution. It always is time to use caution, but be more aware of the fact that some downside levels are-- downside targets are there.

So let's talk about the FOMC for a minute. So there's about a 70% chance of a 75 basis point rate hike for next month's meeting, and next month's meeting is going to be an important one. Why is that? It's because the projections are going to come out.

Now, it seems like the Fed funds futures are looking for a 4 to 4 and 1/4% funds rate at the end of 2022. So what does that mean? That means another 200 basis points of rate hikes. We're currently at 2 and 1/4. And if they raise up to 75 basis points next month, we're going to be at 3%, and the Fed funds futures, again, are portraying a much higher rate than that.

The euro dollar futures, which is something that I track, is portraying about a 3.4%, 3.5% rate, and that's over the two year-- over the next two years. So as the Fed has been telling us, rates are going to stay up, and they're going to stay high for a long period of time. Now, as it comes to the September meeting, one of the reasons why I think it's an important meeting for all of us to pay attention to is because they will review their projections for different segments of the economy.

So they're going to review their projections for GDP, unemployment, inflation, and the fund's future. So all four of these things are really just basically-- they're basically like an arrow, a dart on a dart board. They have some information but certainly not much more information than you and I have about the economy. So if they decide to stretch themselves out and say that Fed funds futures are going to go higher, inflation is going to be higher, it's just something we're going to have to live with, unfortunately.

But there's going to be two Fed speakers out later on today. We're going to be hearing from Raphael Bostic, who's the Atlanta Fed president, and new Dallas Fed president Lorie Logan for some clues on where they think Fed policy should be headed. We did have a hot inflation number out of the Eurozone last night, and that kind of guided their markets as well last night, and I think they have a meeting tomorrow.

We're hopefully going to hear more from them as a little bit more sense of an urgency of fighting inflation. But you never know. Last weekend at Jackson Hole, we had a representative from the Eurozone, and they really didn't express very much urgency in trying to arrest the problem of inflation. So we're just very hopeful that some of that inflation that's in Europe does not spread around the world and to the United States as well.

And last couple of things-- First earnings of ChargePoint. So ChargePoint came out with their earnings last night. Missed on the bottom line but had really strong revenues and reaffirmed their guidance for the rest of the year and into 2023. So that's important, important note there.

We are seeing ChargePoint up a little bit today, and it's been strong for the past couple of months. It's our number one holding in the Action Alerts Plus, and we think that this right here, $14, $15, $16 is a good area to be adding to the name if you're a little bit light in your portfolio. And lastly, we'll talk about the audio recording that Chris and I did on Monday, and there was a lot of that was a lot of fun. So you should have received an email yesterday or maybe seen it on Twitter that the audio recording that Chris and I did-- about 20, 22 minutes-- it's been wildly popular.

A lot of people have been listening to it and giving us some great feedback. I encourage all of you to go in there and listen to the recording. We're going to do lots more of these down the road. This is just the first iteration of it.

And Chris and I are very excited to share it with you, share our thoughts. It expands a little bit more of what we do here every single day on the rundown. And we look forward to hearing some of your feedback on this as well.

So that's going to be it. We're going to wrap it up there. Have a great trading day, and we'll see you tomorrow.