General expectations were to challenge S&P 4800 level; with hopes stocks would not fade into a military weekend. Well, all worked out well for the Index, while most individual stocks did little outside of the leadership, including our AMD as a 'for-instance'. Perhaps others will kick-in later next week.

There's no need to belabor the blow-off style move today; too much negativity which we hoped would generate the upside; plus 'gamma' effects of January's Expiration, which tends to be the year's biggest. So a pullback afterwards for sure would be acceptable, to digest the S&P gains before trying more upside.

A warning though; that many of the leaders are increasingly priced above any sort of reasonable valuation; hence why we think some are holds not buys. at the same time the majority of suppressed stocks (some for nearly two years), if the Averages consolidate and turn higher, have a chance to rally into Spring or even into February, which was what we've had in-mind all along.

More reflections within some charts and next week of course.

Market X-Ray:Seasonal move and overall projection was a January stumble (tax-gain selling) followed by up generally from mid-January into early-to-mid February; barring such a move being inhibited by rising geopolitical clashes, that go beyond challenges.

For now, S&P has conformed to the ideal evolution this month; although both the broad market's participation and lagging Russell sort of mirror my relative timidity about this move, because yes this was looked for; but not enthusiastic with regard to parlaying all this into a significant gain.

This is not 'just' about rates coming down; not 'just' about slowing inflation (we do have that and expected it at a slower pace); not just about sidelined money coming-in (likely is and will; albeit reluctantly); and also it's an Election Year.

If sentiment improves, and/or you get a peace 'accord' of some sort in Europe (even Putin has hinted that it's time to sort things out for stability..all he had to do was stop his aggression a long time ago); or if Israel forces Netanyahu to reach a deal with 'someone' (it won't be directly what's left of Hamas) that will ensure Israel's security, and not be a compromise that is later overturned; we might see that war end; and in which case of course Red Sea flows smoothly while other conflicts (like Iran vs. Pakistan) can go about their business. All of that happens, and S&P will be up to 5000 and today's naysayers stunned.

Friday action was primarily Option Expiration related (check 2nd video for a few words about that); and might indeed presage a consolidation or sell-off, since there is so much skepticism about the upside's blow-off characteristics for the S&P, which of course were not replicated in other Indexes.

Bottom line: Traction holds S&P at record; while broad-markets such as NYA or the Russell represents are lagging but improving. It's a touch trek given the wartime background, and with Iran expanding the war to Pakistan, Iraq and it seems even India, with regard to one tanker they fired on.

We'll see if we get a post-Expiration pullback and then another upside shot.

More By This Author:

Market Briefing For Thursday, January 18
Market Briefing For Wednesday, January 17
Market Briefing For Tuesday, January 16