Tightened-tapering-timelines - tossing, while not tipping technicals totally, for the broad market, while the nifty-pricey pandemic plays generally persist with their ongoing swoons. That's the story as anyone thinking that TINA only now is coming to an end, must have slept through the entire past year.

Being a bit light with this (may as well because this has to run its course) and for a few months I've talked of distribution under-cover of the strong S&P and of the insider selling that was set-up by virtue of the heavy buybacks. I've called those 'indirect extra executive compensation' because they firm prices, and investors don't complain, nor to they focus on 'who' makes the big gains. Of course shareholders feel differently when that very pattern runs its course, and the big insiders (and funds) run for the hills, to nail gains in this tax year.

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During basically 90% of this year, a strong S&P and NDX masked underlying distribution, and that was assisted by Banks and Oils holding up the DJI. So we go into the new year with the 'moat' around the specialty COVID stocks that profited in the pandemic world, unlikely to persist in the 'hybrid' 2022 world. A 'hybrid' world in this case is a revolt against lockdowns, so you get a split of work/study home/online and physically working/shopping/studying physically, at the same time it's hard to say how severe COVID will 'rock a hybrid' theory (SPX, NDX, DIA).

So analysts do talk about a correction of 10-20% in the first quarter, despite a comeback into the new year's start, and that's reasonable, but maybe not so fast. Why? The heaviest insider selling 'ever' has dominated recent months, so it is not impossible those same players will be repositioning in their stocks later, although most big companies became so overvalued that there isn't the incentive to do so yet. And you won't have Fed-based low-rate backdrops that facilitate corporate buybacks either. Which was part of our 2021 warning.

Wednesday will see if we hear more or tougher talk about being 'courageous', by the Fed, given that they're already behind on a couple rate hikes if one will believe that there's not something stewing beyond the known to have justified the insane extended 'emergency' liquidity offered this year, beyond last year's, which was actually essential to stabilize the Nation. So we await as well. Can this market snap and take a huge tumble? It can, and it may. I'm interested in a yearend rebound, which could be dramatic even ahead of a tough 2022, as well as with all that insider trading for gains out of the way.

Bits & Bytes: 

Trading is limited in this 'holding action' day, which did see mixed action repeatedly. Keep in mind 'tax selling' both for losses 'and' for gains, persists.

California slashing 'solar incentives', which is really interesting and unusual. It is friendlier to Utilities, and a slight departure (signaling something?) from the 'nearly greenest' state politically. It might not happen, but infrastructure reality in most states is no way prepared for the demand on grids of heavy EV use.

There's no news from Canoo (GOEV) , however they may be quiet while sorting-out a relationship (exit terms or even a different deal) with VDL-Nedcar in Holland. I don't view that as terribly important now, but the EU market could be later on. It's been clearly stated by their CEO that he now wants initial production here in the USA (Oklahoma and/or Arkansas). It's very speculative, generally never included in media discussions of EV makers, and in a sense that's good if the company does pull off their plans, at their price point, and outflank the others at least in terms of vehicle-market-segments they are planning to cater to.

In-sum: 

The Fed already begins withdrawing funds from the system, and what the markets sense is that the Fed doesn't have to adhere to a trajectory that's anathema to the market holding together. But the speculative fervor in the 'big play' pricey stocks not only ended, but will get rebounds within downtrends.

It promises to be different for the smaller stocks that are novel or disruptive or both, and ideally are not yet heavily owned by institutions. Many perceive fund ownership as a plus, but it depends on the stage of accumulation or eventual distribution, where a given fund is loaded to the gills with stocks having a fishy future. The word 'valuation' matters, most of those pricey stocks are riskiest.

The other issue is concentration in ETF's of certain stocks, where a manager might find price declining of a stock in the 'basket' that's doing fine, because others in the basket aren't delivering, and the fund or investors are selling. A hint of that is a large number of big stocks with high insider selling this year, a characteristic I've noted before. Much is pending ahead of the Fed decision.