September may be scarier than Halloween this year. With reports on jobs, services, and manufacturing in the wings for the month of September, investors are bracing for dark skies ahead. Fed Chairman Ben Bernanke’s speech at the Fed’s annual conference on Friday, while it hinted at further measures to come to keep the economy from receding further, did little to dispel the gloom.

In fact, some economists believe, as David Rosenberg said August 25, that the country is in a depression, not a recession, and continued troubles will not be a double-dip but simply more of the same. However, Bernanke, while acknowledging the current slowing of the economy, asserted that signs were still present that indicated an upturn in the economy in 2011.

The Fed chairman must walk a fine line, appeasing deficit hawks while still promising that there are actions that can be taken to improve the economy should it prove necessary. Some Fed members are against taking any kind of action lest it prove expensive and unnecessary, while others cite the current high rate of unemployment (9.5% in July) and are looking for additional measures to stimulate growth.

Rosenberg, however, predicts further hard times as some analysts have cut GDP estimates for 2010 and Chicago Federal Reserve President Charles Evans warned of a higher double-dip recession risk. Other signs, such as the put-to-call ratio among investors rising and cuts in revenue estimates by a number of companies, as well as the lowest housing starts on record in July since tracking began and a rise in foreclosures of 8% for the first six months of 2010 compared to the first six months of 2009, bode for a pessimistic start to September – with investors expected to avoid the market as the month begins.