Traders are probably torn - between 'fighting the tape' and 'fighting the Fed'. Their trend-following tendencies had them open-minded to utter collapse just a week ago, with many only now embracing the upside bandwagon, which for that matter might consolidate slightly, after achieving a new record S&P high.

Granted there's hardly been a tougher backdrop; but we've been optimistic by including 'fundamentals' with our technical work; as that led to psychologically having something other than an insane perspective about what's likely next.

My embedded comments about United's snafu don't entirely cover the issue (now up to 200 flights cancelled for Christmas Eve); other than denoting Scott Kirby, nice guy and CEO, got too cocky in slamming competition last month in proclaiming United wouldn't have the problems both Delta and Southwest at the time were having due to operational issues (during Covid; means crews). If you cancel flights with intermediate stops; or turnarounds; you disrupt flights down-the-line that day; and that's extremely disruptive to airline operations.

Given that this week Delta specifically asked the CDC to reduce quarantine requirements for people that test positive after vaccination, I suspect that the problem at Delta (so far about 70 flights delayed or cancelled for Friday), and at least partially at United, is due to positive Covid tests, and the need to pull crew members for a big chunk of the month. Many pilots boycotted vaccines.

Also remember Delta operates about 500 more mainline flights/day than does United, which outsources more flying (both percentage and absolute number) of flights to regional carriers than any other US airline; who have personnel of their own with separate Covid-related issues and policies.

The 'Bull/Bear' market of this year was essentially the bifurcated projection; it was tough at times; but it paid not to fight the tape or the Fed. Interestingly this also sets-up a bit of a continued strange animal market for 2022; because we have the bifurcation; and the change for small / value stocks to perform, even as the S&P may well be limited to something like 4800-5000 (a range is fine).

So we got a record S&P high; and need core as well as value stocks decently performing, in order to keep this up a bit longer. I'm not entirely comfortable to buy the entertainment, dining or current versions of 're-opening' trades; even though I realize demand for the products is out there (cavalier risks or not on the part of the public). It's pretty transparent how this will evolve. Should Putin go nuts and try to get 'chicken Kiev' on his plate, that becomes big trouble.

However, to achieve goals next year, you'll likely have people doing even a bit more aggressive selection; in what typically is called a 'barbell' approach. For the most part that's what we've suggested by buying smaller (and riskier) tech stocks, whether focused on photonics or not. In a sense this is a continuation or resumption of 'TINA' (there is not alternative); and eventually that's serious as a concern; because there will be a price paid to recoil from Fed stimulus as well as that winding-down and the Fed ramping up tighter monetary policy.

However the dynamics already weighed down the market; there was pent-up demand for a turnaround as tax-selling (for gains not just losses) mounted in the preceding weeks; setting-up the so-called 'Santa Claus' rally I looked for.

I believe we'll see more of this next week and then perhaps initial 2022 upside with some bifurcation (where some may take gains in overpriced stocks; while also realizing the chances of President Biden's higher taxes may not occur, so what is achieved is buying another year before taxes have to be paid). Sure it is still debatable, but the divided situation in Washington is the current picture.

I'm also optimistic about a handful of stocks that went public as SPAC's; but for sure they need be disruptive, novel or have superior products in their mix. Some are flat-out gambles; others are well-positioned by virtue of early buyer fatigue and loss-selling, even if the CEO's were naive in going for SPAC or a PIPE structure for financing. And I'm glad that some pundits disdain them all; that's a plus in a sense, as the ones that have the right staff and products now have a chance to explore (hopefully not dilute, but some have no choice) new financing to ultimately deliver some of the promise investors were looking for.

I suspect it will be an interesting year in all aspects of that; including whether a couple merge with bigger partners or slow their 'cash burn' and salaries with the goal of making it to fruition without too-clever structures. Some thought of course they were avoiding the perils of Wall Street listing or conventional fee structures; when what they did was enrich investment bankers, earliest SPAC investors, but at their own detriment and that of shareholders. I warned of it a few times; and now we have initial (toe-dipping) positions in a few of them; that maybe (just maybe) will do well in the months or even years ahead. The ones we're in that went public as SPAC's include Luminar, Canoo, Rockley, and next year I have my eye on one that will be structured differently. These are all speculative issues and are intended to be just that.

In sum: I tried keeping this 'brief' ahead of Christmas. I still think technology or more specifically semiconductors and photonics, will have opportunity next year, among other areas. However I tend to limit myself on sectors that I view; which used to be merely the primary indexes, but I moved to smaller stocks in a recognition of the bifurcation we looked for in the past year; and believe that the strong S&P was masking selling in more or less everything else; which for the most part set-up the recent opportunity to place some bets (if appropriate which only an individual investor can ascertain; as well as how much risk).