Vivid vitality describes the superficial S&P and NDX behavior into an Expiration for August; while the rest of the market is more like what I'll call a 'Geritol' market. To the youngsters who never heard of that product, if was an early one for 'tired blood'.   

That's what reasonably describes a market that's had rebound fatigue for weeks as I have noted; with the 'Generals out in front of the troops' being a valid perspective of this kind of market. At this point everyone realizes it's a bifurcated structure, led by a handful of mostly technology stocks (including major online players).  

Typically the 'commanders' won't stay out there all alone for long; inviting snipers to hit them if their ground forces don't advance to join the battle. Of course, along this line, there's little doubt but that Apple remains the sole linchpin for this market. And yes, along with Google, Amazon and a couple others compresses proportionality of this handful of stocks 'domination'. Apple of course higher ahead of 'date of record' for the split; which perception of lower price makes some 'think' that improves their market cap; but it doesn't change it. Having more participants buy it and ideally the launch of 5G iPhones this Fall, would improve market-cap; that's the bullish 'hope'. 

Executive summary: 

• Just ahead: note Apple officially splits 4-for-1 at the close of business Monday;

• Once Apple has completed the stock split, it will have shares trading on the new split-adjusted basis starting on Aug. 31, 2020;

• Note that while Tesla's 5-for-1 stock split was officially at the close of business Friday August 21, both Tesla and Apple trade split-adjusted on August 31;

• Super-caps (such as Apple, Amazon, Facebook, Goggle & Microsoft) do continue to 'skew' the market's appearance more favorably than reality;

• That's why both the DJIA and Russell 2000 were heavy or reluctant participants even when broadening-out periodically emerges from hiding;

• PMI's and other data (like Housing outside of expensive major cities) is a bit encouraging; but this market is about liquidity; hence the concentration that I have referred to as a 'bifurcated' market for months or even longer;

• The American economy is waiting for a reliable vaccine; which has a good and potentially negative side; but goes on in more resilient way than some will say;

• Credit has not entirely seized-up and things are not as bad as some contend (I guess it is for those in certain circumstances; but not for the stock market); the collective earnings were down about 35%, but not as bad as broadly feared;

• And again; revenue and earnings were helped by companies getting lean fast, and limiting payments to workers; which also means that even if we probably boom after we resolve this pandemic (by making it into a 'chronic' rather than 'acute' disease), a lot of workers won't be returning to their former jobs;

• However, that may allow allocations in stocks (and jobs too) to spread into basic industrials and innovative industries; hence you could actually migrate to a better broad market, with reduced leadership by the super-caps;

• Such a pattern would be troops joining the Generals, so even if static positions are maintained on their part would give a better overall picture;

• In the initial reflections, after a celebration of conquering the Chinese beast (Covid), or reducing the dragon to a manageable disruptor of normal lives, you could get a spell where the economy firms but the S&P settles-down a bit;

• However, aside the concentration (of capital due to what's perceived liquid) risks; exposure to China and global circumstances (and interest rates) will return to normal roles; and we could preview what will be the 'Roaring 20's;

• Not to sound political, but regardless which way 'the' vote goes, how policies will rule in the years just ahead matters; both monetary and taxes;

• The willingness of serious money to bolster certain urban areas depends on not just the communities; but perhaps reform groups disavowing those who contributed to disruption and destruction literally in their home towns;

• 'Trojan horse' infiltration by radicals manipulating reasonably legit quests for reforms, has to be recognized and distanced from; lest what company or new resident, would want to invest money in an area perceived hostile;

• There is a political aspect (as the Goodyear saga showed this week); not so much with respect to political views, but the idea that not adhering to any view (or perceived agenda) invites both protests and physical damage;

• The outcome of this is a continuing trend of business to safer lower tax areas; which often is associated with lower wage demands and affordable housing;

• Another lesson from the pandemic is 'reducing debt'; among families if not the Government of course; and don't be surprised if forward spending reflects the experience of 2020, after a brief spending boom that follows an emergence;

• Our parents or grandparents might refer to this (even as more money is made) as a 'Depression mentality'; since once someone goes through it, they tend to live within their means, rather than above (and avoid debt if possible);

• However, enough Americans are not experiencing such pain (working at home or essential fields like medicine, essential services and so on) that sufficient vigor is going to return to some areas; including coinciding with more EV vehicles;

• Yes that's competition for Tesla, mostly being another year away but becomes even tougher for sellers of gasoline-powered cars during the transition; so until then the market for (better) Certified pre-owned luxury cars will be strong (or just leases); given everyone will assume high-end residuals will be even lower later;

• 5G is not widely here yet; but the preparation of 'real' 5G networks finally comes close to preceding any wider adoption of next-Generation multiband cellphones;

• These will include the 5G iPhones and Samsung Galaxies; preferably with the hybrid next-generation Snapdragon chip/modem (all in one) I have awaited since chatting with Qualcomm's President at IFA in Berlin; almost a year ago (the idea was the initial chips wouldn't cover both bands, then a hybrid; then combined);

• All these next processors (for computers too) are either 10 or 7 nm wafer-based; and that means 'SOC' (System on a Chip);

• Benefits: seamless 4G LTE / 5G connectivity; more efficient power-management; more robust performance (new MIMO antennas sort of combine transmissions more effectively; and few dropped calls during hand-offs from 5G to LTE);

• Finally, if Banks and Oils perk-up during the emergence from societal despair, it will help the market (as it has the rotations described) contain shakeouts or even corrections, with context of the overall uptrend from the March 23rd 2020 lows;

• Hence that means what I hoped for when declaring it 'The Inger Bottom' that day; ideally we will not see a lower low for the S&P in the foreseeable future.  

In sum: Nearly 50 years ago, in relatively normal times, we had the 'Nifty 50' stocks; a larger group (often in computer and copying machine and so on; many of which are household names even now) that dominated the focus of money managers; as many were sure they'd dominate in perpetuity (so much for don't time markets; as they of course did not). Many cracked soon; and others waited for the OPEC oil war against the free world, which also resulted in the collapse of real estate in the US oil patch. 

The point is the characteristic (nearly like the program-trading era) of concentration is not new; with money managers almost always worried all the way up (a 'Worry Wall') and then they finally capitulate and chase the upside they missed earlier (currently a variation of that is ongoing).  

As the average stock is merely performing averagely or worse, periodically rallies but retreats are experience, which leaves shareholders anxiously confused; and looking for 'what works'. That is what can drive a money manager who 'must' commit funds (in his mind or by directive) into seeking liquidity for its own sake; ignoring valuation.  

Bottom line: The uptrends analysts and strategists fight; like this year's we've seen, tend to endure longer than reasonable; but doesn't mean it won't snap. September and October and traditionally vulnerable times for markets; but this year is different, at least in a sense. Vulnerability for lots of stocks (biotech or Covid plays especially) followed spikes a few weeks ago; and with maybe 100 stocks vying for the spotlight, it's no wonder almost all are off their better levels (large and small alike).  

Just examples of the purge since the hype phase highs can be seen here:

Inovio: Closed at 31.69 now near 14
Sorrento: Closed 18.82 now near 10
Co-Diagnostics: Closed at 30.80 now near 15
Vaxart. Closed at 16.97 now near 8.22  

Those are a few examples; now we need to see actual progress to see if rebounds are just that (with lots of holders happy to recover portions and exit); or encouraged by 'progress' and approvals; likely what it take to advance beyond those levels.  

Most big pharma 'and' small biotechs started releasing news through press releases before peer reviews (unusual); probably hoping for grant money to publicity driving up share prices. Once that occurred I questioned the hype; whether it was Sorrento initially on the 'cure' (though that's the drug they just filed Treatment IND for); or the leakage of Gilead's Trial data; or subsequent insider selling at Moderna. None of that passed the smell test; and I said so each time. But it doesn't mean solutions will not work; in fact humanity demands that 'some' do.  

Now you have (apparently) the FDA no longer requiring a Covid 'test' to be awarded an EUA (Emergency Use Authorization); as of yesterday. However that's crazy since any company making a 'test' is held harmless from liability claims 'only if' they have a go-ahead with an FDA EUA (I've heard but can't confirm that). My guess is that many people, after this chaotic process, will not even take a vaccine that they undoubtedly will feel rushed through the process nor will their children. Pfizer's early candidate is one they're talking about being ready for broader 'trial' or more in October; and their is a rumor of an approximately October 23rd FDA Panel to consider that.  Novovax and others are also in this race, with several candidates likely. And the vaccines are not identical, which is why (hearing mediocre protection) the idea of combining has been trotted-out; such as Heat Biologics T-Cell focus (no partner or funding yet). 

However so much funding is or will be flowing into the Covid sector, there's room for multiple winners in time. So in that respect the shakeout there precedes what could be a shakeout in general tech sectors. The idea of profit-taking if a 'grander' opening of society is implied would invite (even if temporary) hopes for the 'old' normal return and already pundits are debating if we'll see that (we won't see grandiose spending on new high-end eateries for-instance; and probably no more 5000-passenger ships; while the cruise lines have their work cut out for them to reassure passengers. But if my theme of the 'Roaring 20's' not the Great Depression, prevail; even there a return to some meaningful demand (and airline load factors) will be seen.  

I'm definitely on the cautious side during the pandemic; but eager to feel assured and emerge freely if perception become either avoiding disease or taking a simple Pill to rid it early, if caught. I'm suspecting most of you feel the same about a willingness to cautiously mingle if we get to that point; and I'm confident we'll get to that point. (And no I won't say it will be November 4 for some reason.) I serious think the 'core' of the vaccine and treatment regimens are increasingly understood and we're on the way.    

Conclusion: Some of these are going to work out; others not. It's been lots of effort staying on top of these. Normally I focus on the broad market; S&P, Oil, Dollar and more, and still do. However in 2020 the driving determining force in this market has been two-fold: the power of concentration in a few incredible 'super-caps', as I call them (avoiding shorting S&P in the face of realizing how big-caps distort the Index), and of course Covid-19; both on the way down and back up; including avoidance of so many sectors driving investors into overpriced 'bubble-worthy' types.