This is the daily notebook of Mike Santoli, CNBC’s senior market commentator, with ideas for trends, stocks, and market statistics. It was a helpless end to two brutal weeks that made August a difficult month and made investors feel it was unnecessary to step into a parade of potential dangers that was about to enter September. So far on Wednesday, the S&P 500 has remained in Tuesday’s range, losing its early recovery attempt and falling below 4,000 – the 50-day average – and hanging just near the point. halfway between the June lows and the August highs. Coming into the week, I noted that Federal Reserve Chairman Jerome Powell on Friday sought to keep the market uncomfortable. and tightening financial conditions – and it’s worth noting that the anxiety wall is already quite high and investors aren’t quite at ease yet. even during June-August strong rip. Now, the tape is almost oversold, by some measures, as it has been around the June market lows – such as the S&P 500 up/down line (via Bespoke). Sentiment was also rather muted, with deal/call rates rising and Investors Intelligence’s weekly poll showing the spread rising/falling once again without rising above the “low neutral”. Of course, when the market is in a defined eight-month downtrend, and the Fed is tightening and seasonal factors appear to warn of caution, the upper hand for declaring that the market has been removed and investors are “too pessimistic.” But it probably won’t take much exploration to get there. However, the “known unknowns” about Friday’s employment numbers, August CPI, Fed meeting, September’s traditional weakness and the Fed’s impending QT lift are not guaranteed. additional negative catalysts. The observable inputs to the August CPI look rather benign. The markets are already leaning towards another 75 basis point rate hike in the coming weeks. QT (quantitative tightening) was slightly more than the reduced dose of placebo. September’s performance is tough with markets in a downtrend, on average, but also trending not as bad as in midterm election years (take your pick). No doubt valuations are still a headwind – I said if all this bear brings is a drop in earnings from 21x to 15x (at the June low) then sure. sure the pendulum won’t turn cheap. With regard to inflation, dividend yields, etc., stocks do not appear to be bargains. That said, the five biggest S&P 500 stocks add more than 2 P/E points to the index’s current 17x multiples (495 other stocks are similar to 15x) and, after 1990, the market only simply don’t spend much time under 15x , true or false. Market breadth has even died down, with the VIX snoozing near 25. The VIX is said to have pared the setback over the past two weeks, not in a worrying way, but a reflection of the range trade character of behavior move, perhaps.