A 'treacherous trio' awaits - the new year and revised governance. That's a combination of 'politics', the 'Fed' (including inflation fighting) and 'geopolitics', all of which can shift mildly or dramatically, almost at any time for now.

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Before it's over you might see notable changes in all of these realms, and for sure they are interconnected more so than most observers will acknowledge. Again it's a more-active less-passive investing environment and should be.

For the moment, S&P should attempt yet-another trust, react to the CPI just a day later, and then possibly go on the defensive, but not for a catastrophe.

Too many money managers were sort of trapped by their perceived mandates to be invested all the time, whereas a few investment committees allow more flexible approaches. The common major-manager approach is option-writing to minimize risks in big-cap stocks, and to a degree that works, where they're in a mindset of fearing client departure if they would realistically embrace that clear invitation to sell such stocks last year, amidst buybacks and evidence of historic insider selling.

Currently that has many trying to spin their rationale for holding such stocks, whereas to the extent managers lightened-up, it's actually getting closer to an attractive time. And that's the case 'even if' S&P makes a lower low in 2023. It is a treacherous path, but when the risk 'appears' to be so obvious, it's also an explanation of 'why' some stocks were available at fairly acceptable initiation, not disposition, price levels. It's not entirely resolved, so we can't substantiate that last month was the 'erratic complex' intermediate bottom I identified, but it is also possible that it was.

By the time that's clarified, especially if related to a Fed pivot or even better a ceasefire in the 'war', well, prices will be higher for a slew of stocks many will actually want to own, although while money is flowing into under-loved that survive all this, mega-caps will still generally be on the expensive side relative to earnings, but there are other elements.

Meanwhile you have lots of stocks getting hit while this pre-Election run-up is exhausting (incidentally). It's not just crypto, or Disney (DIS) or Affirm (AFRM), but many of the companies that rely on 'buy now pay later' or similar are toast for now. It's a very specialized market environment, with a few standouts like Amgen (AMGN) (but it's not the only new obesity drug tested or approved for marketing), or one of the few I thought could advance in the domestic-centric semiconductor space, like our very good acting AEHR, or spectacular (today) SkyWater Tech (SKYT).

In-sum: 

The market still has too many bears, but we're getting near the end of this phase of market stabilization rally efforts. Not because of 2008 analogs or any macro bearish perspective, but simply because this move discounted the Election results, and now 'must' at least hesitate ahead of the CPI, which will still show most inflationary influences reduced only slightly, if at all.

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