Stocks finished the day higher yesterday in a repeat of the Jackson Hole episode. Stocks rallied sharply on Aug. 25, the day before Powell. Stocks rallied sharply yesterday, a day before Powell. The market was pretty intense right from the start and seemed to find something in Fed Vice Chair Brainard’s speech today to latch on to, like “the risks will become more two-sided at some point.” Gee, very revealing.

So let’s call this a short-covering rally or, better yet, a positioning event. Because the risk isn’t that Powell is Hawkish, the risk is that he is dovish. And that is the mentality of how the market thinks. Could the index rally say 4,020ish, then turn lower and fill the gap at 3,840? Sure, that seems possible.

Is Powell like to be dovish today? Probably not.

IEF/LQD

Powell can’t afford to be dovish. In one day, the IEF/LQD ratio wiped out three days of gains, which is another way of saying that it took three days for financial conditions to tighten and one day to ease back to where they had started.

Taiwan Semi

Taiwan Semiconductor (NYSE:) has always been an outstanding stock to watch because it tends to be a good leading indicator. There is support at $78 for TSM, and if that goes, the next level to watch is the gap at $75.50 and the July lows.

KB Home

The KB Home (NYSE:) chart looks similar to that of Taiwan Semi.

Tesla

Tesla (NASDAQ:) was up yesterday, calling into question my breaking of the neckline on the Head And Shoulders. The answer is that I don’t have one yet. I could have drawn the neckline too low, which doesn’t change the fact that there is a gap to fill at $247. So, it is probably best not to change my thought process around a further drop.

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