Record highs in Indexes were deceptive on Friday; as money tended to be concentrated in mega-cap stocks, perhaps to influence the S&P and NDX, as almost all speculative or small-cap stocks were either vacillating or just down.

Next week we get 'more' information; and it's not impossible that we had very quiet activity following the awaited AI /data statement from The While House Wednesday; then surprisingly benign activity on Thursday; then heavy for the majority of tickers that could actually benefit from Federal 'contract awards'.

We can speculate as to how much was related to over-zealousness for these stocks, including D-Wave and BigBear.ai that we constantly follow. Note that others have joined the bandwagon recently, which is good and not so good; because while more eyeballs interested is a plus; it's also contributing to new volatility, given the new visibility has people buying into recent high areas.

Not to say these stocks can't go higher (in fact we anticipate that prospect as time goes forth and especially if either generates the business deals and / or Government contracts they seek).. just that as (no offense) more retail players get into the 'space' (and maybe that's reflected by the tens of thousands that watched even The Quantum Bull interview of yours truly a couple weeks ago; it attracts more jitters from the high level buyers than those long from last year or simply at far lower prices.

Plus there was this 'pressure' by market makers / option writers to suppress stocks with high Open Interest on just weekly Options (and we warned that was a possible problem and it was) where they try to hold share price below the key Call option strike prices. If that's the primary influence, you might well see some shuffling at the new week's start, and then they move up somewhat.

Market X-ray: a decline in most speculative stocks was masked by strength in the S&P and even breadth and a neutral 'tick' at the end reflected limited breadth outside of the stocks needed to paint a good picture on the Averages.

For instance, even Goldman Sachs thinks we're moving towards later innings of the short covering in the mega-caps, given the magnitude of these moves, and I don't disagree. It's been that kind of worry-wall climbing for some time. If anything those big stocks; settling-back earlier in the week helped the Indexes notch a series of higher highs most days: bull & bear alike think it's stretched.

Fed meeting; big-cap earnings; and a trade decision with the recalcitrant EU. All are on tap; so relax you'll get plenty of excitement (or not) coming right up.

This year is a bit different with the trade & tariff issues and extraordinary tax deductible (same-year expensing) influences on Capital Expenditures, which we have talked about, and is partially central to the President's statement that growth will persist. He's counting on that, and wants the rate cuts to help also.

Speaking of that I was at least glad to hear Trump quip Friday that what he is wanting from the Fed with a rate cut, is to reduce debt-servicing costs a bit. It is of course what I have said often; and it's not (simplicity of media to suggest) merely about helping folks buy homes or get lower consumer credit rates. So we'll see.

We'll also see if contract awards and / or new business deals arrive for stocks we have mentioned, because you often need that or at least good guidance if you expect volatile tickers to extend gains in a seasonally weak time of year, which as I noted actually began a couple weeks ago; and has been resisted by virtue of big-cap strength.

On that front, it might be easy to presume distribution in some of the preferred smaller-caps; but it's not so simple. In most recent data (BBAI is an example) you saw increased mutual fund (and probably hedge funds) buying over the last two Quarters really; as volume on the daily setbacks dried-up dramatically so that negates the idea of any important selling underway. It's simply not.

So I think the same 'information' is known when such shares are up a point, or are down a point, and then the neurotic emotionalism surfaces again. Notice a big increase in margin levels; seasonality; and basically what's called 'retail enthusiasm'.. and it's part of why I've discouraged chasing and certainly not buying opening strength in 'anything', as they almost always a retreat follows.

We'll not know better until we see next week's action for a few hours or day or two; hence these remarks are very brief. Could chat more and still know little. In terms of those awaiting guidance and Earnings Reports; well we all await. I don't know what to say about such stocks beyond what we've already noted; and that is with favorable news they can independently move without support from a stronger market backdrop; but without such an overall tone, it's tougher of course.

And if the market becomes even more of a 'bordello' in the couple of weeks ahead, then it becomes risky for everything if a catalyst comes along to rock the apple cart. An example: I have no idea who chases Palantir even if it's going higher; and I have no idea who'd be selling BigBear.ai, when they seem on the verge on 'confirmatory' formal contracts for what we think are at this point ongoing contracts (FAA and US Army as examples). So volatility as well as a more-easily agitated structure of share ownership, which isn't new (to that ticker especially); but so many more eyeballs are on it; that blinking is being seen ..both on the downswings and ensuing upswings (the latter clearly looked for next week if the market tone continues to permit).

Also, the US missile defense agency on Friday said it will call on companies to submit proposals for an “advanced, multi-domain defense system” capable of detecting and neutralizing threats “across all phases of flight by ballistic, hypersonic and cruise missiles” .. soon. We'll see and all this is pending plus what many stocks (including ONDS by the way as part of the close-in drone intercept approach not specifically noted in the statement) are waiting for.

Bottom-line: an erratic Friday delivered record highs in Indexes, and notable declines in almost all 'meme' or speculative stocks we follow. Hard to gauge if this is the delayed reaction to excess excitement; or just weekly expiration in a couple tickers where option writers worked hard to suppress price.

The market may punish the mega-caps more and soon; but we've pointed-out that everyone knows that, and hence you get trading over-your-skis ramping or that kind of moves in a lot of big but potentially risky stocks. And as far as the drops, again have to see (in smaller stocks) how they behave next week.

As to the general market, August and/or September is often when they come to raid the 'bordello' (my old story) and 'if' they do that despite new-era focus stocks offering certain appeal, the raiders 'try' to take the good girls, even the madam and potentially the piano player' (these days a DJ). And yes weekly options (which I don't really like) have increased both the instability and increased speculation by people waiting for things on a certain day or week; also makes action more erratic, and in both directions, for many stocks.

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