Next week brings the Fed and they may actually punt here. Covid numbers are a reason, but this Evergrande thing may spiral and with stocks pulling back a bit they might balk. But, they have been pretty intentional so I do think they’ll ultimately have something to offer, maybe an adjustment to the mix with a slight decrease so technically they can say they’re starting to taper.
Whatever it is should be good for stocks, unless Evergrande blows, and if the Fed tapers, even if it is just a token, that could make for a quick mess as they’d be seen as out of touch.
SPY put in a break this week, but this was just like last Friday when there was dumping ahead of the weekend. Likely a lot of folks trying to get out of the way of Evergrande. Which makes this more of an issue, because if we now have two weeks of risk aversion from funds tightening up because of a situation, is that situation maybe about to get more out of hand?