Technical & Seasonal factors continue to conform to the ideal; except for a dearth of 'breadth' in the pre-crashed stocks, which are the market majority.

It was helpful that the consensus of earnings turning higher, with my view of the University of Michigan sentiment survey as 'not inconsistent' with upside optimism. However S&P is still likely to be an evolving 'stair-step' process. At the very end I note Moody's downgrading the U.S., which may soon matter.

Many factors provided 'headwinds' to stocks, led by rates of course. But that changed as anticipated (not just the Fed 'staying paused', but it's part of that), and now you have 'tailwinds', in some cases from the same aspects, but also if an expansion (or escalation) of the war can be averted.

Yes S&P held the gains into Friday's close and that give a bit more 'cushion' in a technical sense; although I think that's the 'advertised' Index-led picture, which can look overbought, while the non-mega-cap stocks surely are not so.

Market 'X-ray' - likely was assisted by Oil's projected rebound and chips too; despite China saying they have competitive semiconductors (only 'somewhat' as I understand). The key today was the 'removal of the stinger'; rate fears.

Yes there's a survey suggesting most people expect another rate hike. I think not; plus Fed patience waiting for 'disinflation' to improve (lag effect) might be enough to keep the Fed at bay for now; and allow seasonal norms to prevail

A 'flattish' yield-curve is acceptable; the technical effort (concentration into a handful of mega-caps) at least lets S&P 'appear' to make 4400 'resistance' into 'support'; although certainly broader markets have to do a lot to catch-up.

Oil was key to rebounding, adding to strength in all 'usual suspect' very pricey stocks... and I don't understand why Oil traders (or equity traders) would get or be short 'after' a decline; and I suspect short-covering helped upside a bit, perhaps in Oil as well as stocks.

Oil demand is not lower in the USA; but production is up relative to demand. It becomes a nexus of sorts, and that can relate to WTI trailing Brent just a bit. I believed Oil was 'not' going to 120-150; so the prior gains would be unwound, as they were. There's an OPEC Meeting late this month and the Saudi's likely will make an effort to keep prices from going lower. And of course an 'actual' clash between Iran and the United States would indeed pop Oil far higher. If not the return to my 75-85 (roughly) trading range made sense then and now.

I do believe (and have believed) October's washout was a 'Floor' for the S&P, while depressed stocks may oscillate in defensive natures until later this year; then have rebounds, especially those with meaningful liquidity and prospects.

I'm not focused on 'checking off boxes' to define a bottom; given the broader mass of stocks had already crashed (I call them pre-crashed) and what was in my view needed was a break of S&P taking out stops and algo-traders if they didn't realize that's a process in completely a washout.. and we already had an A-B-C outlined decline.

Fine; but that also leave this new 'A wave' extended; but it can get more so if a degree of progress occurs with China next week (Meetings ongoing now.) I indicated POTUS would be meeting with China's Xi formally in San Francisco earlier this week; and I guess so; the official announcement is Wednesday.

Iran hesitates direct attack or even with Hezbollah .. so far .. as it continues work on nuclear weapons; while knowing the USA is positioned in a powerful way at the moment, in that region. It may even eclipse the Gaza situation in a 'realpolitik' manner, whether the Hamas attack provided an excuse for Navy deployment or not.. or whether anything thinks the US wanted engagement (it didn't but here we are). Iran's prospects 'without' nukes and 'with' our Navy as well as U.S. Air Force flaking it from 4 sides, are slim to none.

(Yes; the Med; the Indian Ocean and Red Sea, close enough without entering the Persian Gulf for Carriers; as smaller vessels 'are' reinforced in the Gulf from our Bahrain 5th Fleet base; plus covering Djibouti.. and then you have a couple major NATO bases in Turkey, presumably not ruffled by Mr. Erdogan.)

Bottom line: it's not a case of vindication; we're not thrilled with markets even though we are pleased S&P troughed-out establishing the downtrend's nadir, very much outlined last month. Recovery is a process, and it rarely broadens quickly late in a year when there are lots of tax-based moves. However there can be a lot of lateral activity as others are buying perceived value pre-2024.

Part of not being thrilled relates to the difficult semiconductor sector (though it is improving and some of this may relate to next week's s San Francisco talks .. as you know what could be a quid-pro-quo, with both sides having leverage on a number of outstanding issues as these leaders gather). Part of it relates to 'war', and unfortunately real concern that it could escalate.

This weekend you know where things stand; extended S&P trying to forge a 'lockout' on the upside (at least based on the largest stocks; mostly in techs). We'll be on the 'lookout' for geopolitical escalation (or contraction); and touch on individual stocks solely in the video. Increasingly it's been suggested that I focus on 'macro' conditions and not stocks; well that's my preference and has been; problem is the big techs and Oils have been too expensive .. chips too.

At press time: Moody's has just changed the U.S. Outlook to 'negative'. Odd; but of course disruptive for the weekend; saying 'U.S. Debt Affordability' to decline further to very weak levels; no kidding.. I've argued 'debt service' as 'the' problem for a long time; so it's not exactly breaking news (except for a handful of naive politicians perhaps). Huge supplies of Debt were pushed on the market in recent months, and also why we (and others) criticized Sec'y. Yellen for Treasury not doing larger long-duration Auctions at lower rates (not hindsight as I've talk about this issue for years; as a macro concern that's not applicable to very short-term trading, even as it looms 'unsustainable'.

(Enjoy the weekend; markets normally stabilize ahead of Thanksgiving even if we get a shakeout from the Moody's news; but not the same if war escalates.)

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