Equity performance - in a bifurcated convoluted economic 'fighting the Fed' environment isn't easy-peezy; nor are sector outcomes certain, whether they are viewed optimistically (like Energy and for some Banks), or not. Many core areas, certainly big-tech and semiconductors, are down but very much in-flux.

In fact I say this thusly because it's not a question of 'is' a recession ahead; or even if the Fed flattens or nudges up a tad (and then flattens). Rather, 'depth of recession' is the question; because the economic peak is 18 months ago.

Clearly, the foregoing scenario sidesteps implications of the Ukraine War (ends or at least going into negotiations and ceasefire); of China's Covid waves that might widen or contract (domestically and as they export contagion); or global climate issues that infer extremes and higher Agricultural prices regardless of monetary policy anywhere, based on perceived future weather patterns alone.

All of this has had us not just agreeing with those who 'now' are defensive; but being defensive on big-cap and mega-techs for going on two years now. That is why there's a big difference in having lightened up in 2021 as buybacks and then insider selling were masked by a higher S&P; and being cautious about new commitments in such stocks; while not selling or shorting now; as the low risk time to do that was in 2021 or a couple rallies last year.

In-sum: we'd not increase bearishness now; even as rhetoric accompanying bearish views tends to encourage negativity. Of course it may resume or even result in a further 'break' event; but we think that's likely to be more of an entry not exit time. At the moment S&P is fluctuating in a relatively narrow range.

This S&P range sort of has ~3800 as a fulcrum to pivot with small moves that are not definitive; as has been the case incredibly for the most part recently. I don't disagree that some broken stocks can erode or break further; while any effort to 'play' for such decline after they already had a protracted demise, is a riskier approach, and comes amidst 'crowded short-sides' in most such issues for that matter. We'd rather stand aside those and look for washouts later if it's going to pan-out that way.

For now we've got the Jobs Number in the morning and preliminary data has been fairly 'hot'; so if the market's going to rally further tomorrow (dicey on a Friday anyway); it would probably be after the reaction to the report.

Either way Index shuffles should remain relatively constricted (in a range).

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Bottom line: the market remains dicey; limited upside and more downside as potential of course; but note that the debate is about when things improve. It's almost a given that we're nearer the end that start of Fed tightening; although of course the Repo market and Balance Sheet unwinding have more to go.

Many stocks should never been as higher as they were; which I contended in 2021 during the buyback frenzy masking massive insider selling. So now we'll continue viewing stocks that are still 'expensive' but not ludicrously so; and in a sense we may not be at a market bottom; probably need to test October for some stocks or the S&P; but there will be focus issues performing distinctly on their own; or if swept lower with the masses of liquidation (if that happens), they simply become opportune for buying. That also means bears should take care and not get overconfident about another tremendous downside swoon.

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