The month of August may have started with a whimper, a wail, and a whoa, but it is ending with a bang, a boost, and a booya. 

Since its low on August 9, the S&P 500 has rallied 10%, including a tidy 2.8% jump yesterday that was led by the beaten-down financial sector.  Despite the recent surge, though, the S&P 500 is still down 6.4% for the month entering today's session, which underscores how ugly things got between the end of July and the nadir on August 9.

Based on the futures trade this morning, the S&P 500 is going to have more ground to make up as today unfolds.  Currently, the S&P futures are trading 1.0% below fair value.

The negative disposition is drawing a number of reasonable explanations, including a report that the FDIC has filed an objection to Bank of America's (BAC) proposed $8.5 bln mortgage bond settlement, word that a 10-year debt sale by Italy saw relatively weak demand, and a measure of hesitation ahead of today's release of the minutes from the August 9 FOMC meeting.

At the same time, with continued downgrades of economic growth projections and ongoing political/debt battles in Europe and the U.S., profit taking by participants expecting more volatility also fits in the realm of reasonable explanations this morning.

Headlines from the FOMC Minutes should hit the wires at 2:00 p.m. ET.  With the Fed chairman having just spoken in Jackson Hole and indicating policy tools were discussed at the August meeting, it is only natural that some might consider the release of the minutes a non-event.

The minutes are apt to contain many of the observations Mr. Bernanke made last Friday, but what the market will be interested in is the context of the discussion that occurred regarding the possible use of additional policy tools.  Remember, there were three dissents at the August meeting, so participants will hope to glean today whether it is more likely, or less likely, that the FOMC will fire another policy bullet at this month's meeting.

In other words, participants will be aiming to get a sense of whether Mr. Bernanke was simply stating the obvious with an acknowledgment that the committee will continue to consider the relative merits and costs of using the tools at the Fed's disposal or whether he was tipping the Fed's hand that another policy move is in the offing.

We continue to believe that the Fed would like to stand its ground at this point if the economic data and financial markets allow it and leave any additional stimulus measures to Congress.

Before the minutes are released, the market will digest the S&P/Case-Shiller Home Price Index for June (Briefing.com consensus -4.7%; prior -4.51%) at 9:00 a.m. ET and the Conference Board's Consumer Confidence report for August (Briefing.com consensus 52.0; prior 59.5) at 10:00 a.m. ET.

Given the scope of the recent rally, the confidence number seems likely to be the bigger market driver in the early going since it will feed into the argument of whether the debt ceiling standoff contributed to a slowing of economic activity, as Mr. Bernanke alluded to as well in his speech.

It is very unlikely that the confidence number will top the prior month's reading, but a number above the consensus estimate could at least temper some of the selling interest that is expected to be seen in the early going.  Conversely, a worse than expected number could accelerate profit taking from the recent rally.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.