(Anyone notice? There's an ongoing FOMC Meeting.)  

 'To be or not to be' . . reopened is the question. And to what degree, with what commitment, after such a long courtship with isolation; even as there are signs that 'Covee's attraction' to humanity hasn't entirely dissipated.    

It's truly a tough proposition to tackle, more so in some states or countries, as the prevailing moods reflect. And even where it looks safe, there are for sure no assurances, given the fears of a 2nd wave, and the lack of proven drugs to treat Covid-19 symptoms, before risking landing in a hospital.  

That makes many of these moves by states or countries, 'iffy' for sure. 

  Executive summary

• Money moving into unloved areas of the market, as mid-caps fill-in a bit while super-cap FANG types take a rest, this can be constructive

• We continue trading in the S&P range between the 50-200 Day Moving Averages, and that has been our target zone for a couple of weeks

• This shuffling won't answer questions about sustainability of recovery in the market, although you only get rallies of 'this magnitude' historically without it implying higher prices in the longer-term, albeit not instantly

• In-fact, that's a realization we've shared for a couple weeks, including a belief the S&P would fluctuate in this range and ultimately retrench

• Many who disputed our robust shift from bear-to-bull as mid-March fear and panic caused many to liquidate at the most inopportune time (we'd given a preceding time to lighten-up in late January / early February), of course now agitate for a pullback to get a chance back in

• Markets (barring an exogenous additional shock) typically don't provide such an opportunity, which may contribute to the market's reticence to conform to such ideas from reactive rather than proactive investors

• However, visibility on earnings (even for the best performing stocks) is a challenge to say the least, given unusual weightings we have in the mega stocks, however you are seeing average stocks do better

• The broadening-out was missing even 'before' coronavirus, as often noted (heavy lifting primarily carried-out by a handful of stocks)

• Now you have stocks like Alphabet (GOOGL) and Starbucks (SBUX) missing numbers, but everybody expected that throughout the crisis

• Note that Starbucks (which benefits from social mingling, has to with their prices for coffee) warned about 3rd Quarter in guidance, and that's contrary to those expecting a rush back to pre-crisis business

• Ford (F) projects a 5 billion loss for Q2, but again that's unsurprising of course (part of why I thought the 'Crash' in February into early March, essentially discounted most of the immediate negative concerns)

• Our Advanced Micro Devices (AMD) made their numbers but missed some estimates (like the Enterprise sector), so it's down a bit too (that's fine we own it from 16-17 and have discouraged buying up here)

• We're not very eager to sell given AMD's processor leadership we've discussed, the overall report is not that poor as some in media make it sound, (Lisa the CEO will be interview on financial TV in the morning), and afterwards I'd not be surprised to see a rebound, but in either case I know what their processor means on the server side as others can't .. at least just yet .. compete)

• Expect the super-caps to return tomorrow and probably an up day, 

• My suspicion: at the end of the day there will be several viable Covid-19 vaccines and combining world production capacity, the world indeed will 'give it a go' and it won't be a year away; but within months

• The forgoing, obviously, is not the Bearish alternative for humanity

• So 'cheers' to both 'lives & livelihoods', as we in the United States and parts of Europe, before effective treatment, guardedly give it 'a go'

 The 'window' for trading - within this targeted rebound zone is sufficiently opened wide enough to allow these minor swings without instant resolution as is evident from the action really of the past week or slightly more.  

Does it require an immediate extension higher or break lower? Nope. But if one asks, the expectation would be that the Fed-assisted 30% or so rally of several weeks, which I called for at the mid-March panic capitulation (to be labeled 'The Inger Bottom' ideally).. if it hold satisfactorily (and it should), it remains constructive and leaves us optimistic about migrating through this historic pandemic, not without bruises to many sectors, but with the macro comebacks that the S&P upside leadership has been telegraphing.  

Sure it's a tough environment and capital markets will remain busy to say the least. And pressures to adjust 'supply-chains' (a longer-term concern), as a longer-view issue. Banks need to be conservative and maintain or if not properly prepared, take loan loss reserves to-heart, as there will still be a lot of failures and defaults (and even consumer non-performing loans) to contend with. OIL will be defensive and also trade relatively narrowly, so no consistent help to the averages, for more than brief reprieves.  

In-sum: this stock market rebounded extremely smartly, but for those who rode-it-through, as contrasted to those who had liquidity to buy at the lows, well, they had differing results (sure; when a stock drops 50% it has to gain 100% from that point to be where it was before, so that's why if one was of course prescient and brave enough to venture-into the panic; it helped).  

Leadership of technology 'in-theory' is fine, but the concentration in a handful of issues has to be watched closely if that returns (only absent for a few days), since that is the 'Nifty 50' of this Generation. Go back to my youth in the market, and that was the concern of a concentration of funds all doing the same thing, which just like you saw in February, doesn't end well in almost all cases. Here they jumped (leveraged) right back into the same stocks, but what those stocks 'promise' varies significantly in this 'new world', so hence we have to be aware of what the risks are by the algo-hedge crowd repeating their past behavior, which can turn-into nasty behavior again.   

Yesterday, really breadth stayed positive and the NYA was up for the day. It was the super-cap stars that got hit, so if they bounce back tomorrow (likely) the session will appear to be more broadly up; even if it was actually broader today.