Market Briefing For Monday, May 11

02Sequential S&P records - are both technically constructive (based on some broadening); but simultaneously worrisome, 'if' you assume 'house of cards' structures underlie where we are.

Actually while it's been schizophrenic, or some say insane, 'if' we get a prompt resolution to the Middle East crisis (so far elusive, along with no enthusiasm, as far as allowing Iran's Islamic regime to be perpetuated in any form without a return to a secular society that doesn't threaten it's neighbors or beyond), it would bring rapidly lower Oil prices (contrary to analysts contending otherwise probably to protect their trades) and an enthusiasm based on some normalcy.(As of noon ET Saturday, Iran and the U.S. appear no closer to ending war.)

At the same time, this is such an extended market, and so dependent on AI of course; that one has to be a little less-enthused as S&P works higher, 'even if' the enthusiasm for a few stocks in-line for significant contracts offers promise for some of those tickers, although clearly the preceding Federal shutdown as well as DHS funding delay, indeed pushed-everything forward several months and does yield the prospect of a seasonal S&P exhaustion butting-up against favorable news resulting in positive responses for several new-era tickers.

Plus now we have POTUS heading to the 'actual' strategic challenge: China. While Iran is either distracting or in the center of Trump's focus; this meeting with President Xi matters a lot; and 'if' it goes well both calms Taiwan fears at the same time as it 'might' sort-out some of the 'trade imbalance and/or tariff' issues with the United States and China. I doubt it will resolve AI /DeepSeek; as that's the real competitive challenge for the moment.

By the way, just as China is the primary source for germanium which the U.S. is weaning away from (thus helps LightPath). China also makes 'micro-LED', for which Kopin is the only U.S. company currently able to make this material (while we're all excited about 'AI / Server / chip' optical connectivity largely replacing copper wire interconnects); KOPN also makes these microLEDs for the USAF & US Navy F35's target acquisition displays; as is probably why they got the further research contract; given improvements microLED offers.

For any who don't know; a regular LED (such as a flat panel TV) has to have backlight; typically fluorescent, to illuminate the LED diodes. With Micro-LED, 'each' diode is its 'own' light source; tighter pixel density (higher resolution) with lower power consumption, and again.. no backlight. Also in computers it means faster throughput, no heat like copper and basically next-generation.

Market X-ray: while short-term machinations relate to the Iranian impasse or even the Trump/Xi China summit just ahead; there is no doubt 'concentration' of interest in AI, semiconductors, quantum and other new-era sectors, has at least got the market's attention; as clearly you'd not have S&P so high were it not for extended mega-caps (at least for now) getting a further lease on life.

Sure, ultimately this has a price to pay in the big-caps; and we'll have to see if the 'sell in May and go away' mantra holds any sway. Might not 'if' we get both peace in the Persian Gulf 'and' in Ukraine, with the carnage still inhuman.

So for now the market still has Call options being chased aggressively, skews collapsing, and upside volatility in mega-tech remaining completely abnormal. The parabolic dynamic remains alive, with limited warnings of future pressure, after a near-vertical squeeze, while underlying positioning could become lots more unstable, 'if' you don't get progress geopolitically that relieves the tension.

(Yes higher parabolas shouldn't be comforting even when profitable, but while upside is welcomed by shareholders, in an ideal world then trim some gains - I must segment the drone or aviation security etc. stocks, as those awaiting or groveling for Federal or similar contracts, are likely to respond accordingly.)

Friday was perpetuation in low-key of the move; which was constructive ahead of the weekend. I suspect the new week to have anxiety of its own; related to a few of our favored tickers; not just the global challenges. D-Wave, Veritone, and Kopin all report on Tuesday. And then we have Thursday; with the most drama centered around the Ondas call; as well as Unusual Machines. I expect 'both' to give very optimistic guidance and traders will battle it out as to whether they think the future is already priced-in. It's not but you never know how erratic players will trade it minute-to-minute. Sometimes (like you saw with Redwire and BigBear.ai this past week), it can set-up so-called selling on disappointment and then a stocks rallies to skeptics surprise.(I will try to monitor these Analyst calls, though obviously can't be on-live with more than one at a time.)

Enjoy the weekend and hopefully the backdrop will allow good ticker news to be reflected at least for some of all these coming up ... bated breadth.