The road ahead will be tricky, with geopolitical risks probably exceeding the constant focus on monetary policy and interest rates. While I really expect the year ahead to be healthier for small-cap stocks with financial substance or an innovative or disruptive service/product that can attract funding (it hardly can be worse than the past year for stocks that were flat on their back regardless of meg-cap strength... famous last words; but I think better times will follow).

Stuffing of the mega-caps is fine if you own those; indigestion risk if buying at these levels; and irrelevant with respect to helping along depressed stocks. I will share quite a few charts this evening with limited text.

The destination for S&P is 4600 for now; possibly higher next year. However next year will be more dependent on Nasdaq broadly and Russell-type stock moves, given how the majority were suppressed all year long (less evident in a glance at Indexes, where they are capitalization-weighted). Challenging but with rates destined to come down reluctantly; it could be a better environment.

Market X-ray: Pre-holiday action was satisfactory. No impact from the briefly concerning 'explosion' at the Canada-US 'rainbow bridge' border. FBI later is saying it was not terrorism, but a crazed border runner at high-speed. I don't know, but certainly there were jitters about Islamic terror threats this weekend.

So, as the Fed & Treasury (for different but complimentary reasons) become 'friendlier' (or held-at-bay due to their worries such as regional smaller bank or offshore issues) .. this market absorbs it; thus its been nothing if not.. resilient.

The first half of December might be about right for a retracement ('B' wave in our 'A-B-C' rally off the projected washout low of late October); and it might be a bit nasty in S&P appearance, but do little to the already-crashed stocks. And then another move up which would be an ensuing part of our progression call.

Bottom line: the ability of S&P to absorb macro concerns, as we'd forecast this time of year (but that's not the point), is constructive and a fairly big deal as relates to the set-up for a reasonable pause to refresh then more upside.

Whether it's war, recession fears, or the domestic political 'theater', monetary policy probably is the main determinant. And modest guidance retrenchment by many companies actually helps keep the Fed restrained too.

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