Mitigating upside prospects  for the short-term, relates to relaxing most views about emerging from the National Cocooning we've been through. It is a tall-order, especially given how many Doctors or epidemiologists think all the statistics are inaccurate and have officials 'flying blind'.  

So now it's at least temporarily essential, to speculate on disappointment coming; not merely given the S&P sort of priced for perfection (best couple weeks for a long time, which usually means coming pullbacks hold higher bottoms); but given the near impossibility of evaluating where things now actually stand medically, it's a tough call for Bull or Bear coming right up; as it depends on calls made by Governors who are cheered-on by Trump who seemingly encourages rebellion against his own 'phased' guidelines.  

We can't say if that's wise or not; and I'd love to prefer that an 'immediate or phased opening' is in-order'; though our roll-of-the-dice on that might be about the same odds as what we're hearing from various official sources.   

I spent a good part of Friday shuffling through well-phrased studies, and a few editorials, to conclude that none of the various schools of thought are moving forward with any data-driven confidence of where things stand. It's a crying shame; that despite the market (as forecast) rebounding in truly a way at least as strong as we envisioned, calling the low a month ago; but because the health and safety of our Nation is at stake; besides of course a broad desire to ease the economic burden by opening up the economy.  

If the economic situation somehow normalizes (watch the price of Oil in a sense), it will definitely limit the downside risk. Still, a downward purge of some type (in a process defusing some recently-excessive enthusiasm) remains logical in the wake of forecast upside surges, from March's 'Inger Bottom' low (max-fear) panic capitulation 'far-safer' trader buy points.

That forecast reaped the benefit of bearish extremism and as the market's a 'discounting mechanism', it both anticipated the economic 'carnage' with projected decline from 'Inger Top' late-January / early-February behavior, evolving into the WuFlu-based 'Crash of 2020' as assessed throughout, as well as the strongest rebound in two weeks since the 1930's. Its fate may hang however on medical results, clearly impacting economic prospects. 

Overall I caution that even though we're optimistic about therapeutic drugs and eventual vaccines; triggers for Friday's rally indeed was a combination of ingredients; a) economy 're-opening plan' of course; b) Boeing or even German car makers resuming work this coming week; and c) the slightly hyped 'anecdotal' report regarding Gilead's drug remdesivir, which looks good (but is an IV hospital-administered treatment and still experimental at this point); along with overly-optimistic ideas for major metro city openings (such as NYC's Mayor saying July-August at the earliest).

tatus takeaways this weekend:

• S&P remains 'priced for perfection'; limited maneuvering room higher, as risk returns to the fore for at least a pullback on-tap soon;

• JP Morgan halted 'home equity' loans, which could be indicative of concerns about Loan-to-Value relationships, if housing prices crater; 

• Even though this is a biological crisis, it increasingly becomes financial the longer it lasts; not to mention the impossibility of long-term Fed or Congressional subsidization of businesses, or the overall population;

• Though this economic debacle was 'induced' to protect the population; the severity becomes 'Depression like', which slumps further, should it be non-recoverable to a semblance of normality, sooner than within a year or two (it would work; but cause major valuation-criteria shifts);

• Mass layoffs would deepen an economic slump; and that's part of the 'Catch 22' challenge of quickly trying to emerge from this crisis, but at the same time without inviting (interstate) renewed viral spreads;

• Hence 'optimism' requires emerging at-least on the work side; before sliding further, within say the next 2-4 months; and that's challenging; at the same time our preference of course is for it to unfold thusly;

• On the banking side, loan-loss Reserves (see chart last night) aren't so impressive, even with Fed-backstop, if this crisis deepens for long;

• Bipartisan efforts to focus calmly on where under-investment lags way too long (like infrastructure) are needed;

• Despite squandered emergency funds (for years, I don't mean during just this crisis); we might rebuild foundations for more even growth by focusing on coherent growth concepts; not just short-term bailouts, as important as they are too;

• And of course the stock market though it conformed to both our 'purge and surge' forecasts over the past three months; is entering a plateau of sorts which is a herculean effort to bridge-a-gap toward recovery.    

In-sum: the stock market will try to extend. There's a 'perceived sense' of what I have said for weeks that the market and psychology needed most: 'the idea death is off the table as a reasonable possibility' from Covid-19.  

That alone is what drove prices higher on Friday, as implied by the leaked and anecdotal Chicago trial interim data regarding Gileads's remdesivir. Several other therapeutic treatment drugs are being evaluated helps since clearly a vaccine is further-off. All along we'd said drugs are by far a more crucial element in this acute phase of dealing with coronavirus.  

The only statistical model that today's 'count' can refer to accurately is the number of people dying in hospitals from Covid generally stabilized, while there's no way to know whether actual infections are down without testing on a widespread basis; and that's not happening. Some cities, New York included, have been revising death tolls upward. Even Wuhan China did.

So this is the heart of why many urge caution in overstating success or for that matter say it's premature in many ways; and invites rebound concern; at the same time we all know the economy has to get-cranking again. For sure there's no perfect answer. That outcome matters to stock as well.

Conclusion: Next week 'caveat emptor' prevails both with respect to S&P chasing; and with regard to assumptions regarding early 'opening' phases that everyone wants; but many might come to dread. Fingers crossed, as we all want this to be successful; and not return to Square One.