HERE IT COMES

While trading volume in August was the lowest in 5 years, September promises much more volume and volatility.   Kids are back in school and traders have taken the last of their summer vacations.  Combine that with the huge market making events over the next few days and the stage is set for  a make or break moment in this enduring Summer rally.  The key dates over the next couple of weeks are:

• September 6 - The European Central Bank meets in Frankfurt, Germany.  The markets are expecting a few more details of Mario Draghi's promise of a couple of weeks ago to do whatever it takes to save the Euro.  We'll see.
• September 7 - The August Non Farm Payrolls and Unemployment report is released.  Strength or weakness here will be evaluated to determine the likelihood of further easing by the Federal Reserve.  A weak report will likely give the Fed cover to announce more easing.  A strong report will be good for the economy and will likely preclude Fed action.  Either of these two would produce positive results for the markets.  In this case, the worst case would be a jobs report that is neither too cold or too warm - the Fed probably would not act and the markets would not get excited about the future prospects.  
• September 12 - The German Constitutional Court meets to determine the constitutionality and legality of the European Stability Mechanism (ESM).  This will be a very significant conclusion as the ESM is key to the possibility of a European solution to their debt crisis.
• September 12-13 - The Federal Reserve meets to determine if the US economy is poor enough to justify another round of quantitative easing or some other fiscal stimulus.  The announcement will come the afternoon of the 13th and it is widely expected that the Fed will act.  Any disappointment will lead to a sell-off in the markets.

As you can see, the next two weeks hold the key to the remainder of this year (maybe longer).  Hopefully, we will begin to get some clarity over the next 10 days.  Hold on - things are about to get interesting!