Shorts hands are still stuck - in the cookie jar, so to speak. Sooner or later, of course you'll get a shakeout or even a roller-coaster series (not always fun but it's reality many times) that rocks the S&P. But that time is not just yet. So it will be just a bit longer before the hungry naysayers get to nibble cookies :).

Over the last couple weeks we noted that Nasdaq's effort to blunt the trend toward 'concentration' whereby money managers were primarily focused on a mega-cap group of leaders commonly called the 'magnificent seven'. Well, the Nasdaq may not have infinite wisdom; but in this case they were right, and it was my view that compelling Indexes to reduce 'concentration proportions' of course was unusual; but the best way to improve the overall 'breadth' data.

This compelled re-distribution of concentrated NDX stocks (in particular) was what it took to levitate the overall market a bit, just as we suggested with 'the rising tide lifts all boats' remarks. Similar to 'timid troops in a treacherous mine field, leave their trenches to join the brave generals at the front'. (By the way in occupied Ukraine it's the opposite, as Russian Generals disappear or stay in the rear, while the troops are left to contend with cluster munitions now.)

I thought S&P would struggle a bit on Friday ahead of a 'military' (?) weekend, so that's why we didn't expect the early rally to hold; but it wasn't all that bad. If not for United Health (which we don't follow) the DJIA would have been off. I actually think it's chart pattern is a range that ultimately breaks lower; but I'm not going to focus on it; just think it was an obvious distribution pattern, so too many shorts and they caught them at least briefly. 

Speaking of mid-July, I also proffered that barring existential developments or crisis, we'd be looking for periodic shakeouts; but not catastrophes, because it is still early in the preparation for upside later in the year for many small-caps; and because money managers / strategists that missed the year's first-half or are publicly still bearish, actually are hoping for lower prices to get in, not out.

Those guys and a couple gals need performance. Worse than having stocks not doing much, some of them played the short-side, got caught-up in crypto crazes or moved into dividend stocks when it was time to focus on growth as noted. I suppose a good example would be AT&T stock, paying a big dividend but goodbye to principle. Been out of it for a long time; and I think you know a reason: competitive pressures, and concern that eventually both effective 5G in neighborhoods, and satellite-to-phone direct reliable connections; seriously cuts into the cellular business; although low-cost services are a here-and-now challenge. That's true for Verizon as well or even T-Mobile, which offers that type of residential wireless; but they undercut their own business with "Mint", which was a smart buy, but ends up cannibalizing cost-conscious customers.

I'll not delve into all that more (made my point; and cheap enough we might in the future revisit one of those stocks); however I will note my negativity about Disney for a long time; believing their was a dearth of visitors to Disneyworld after the post-pandemic surge settled down; and Disney increased prices to a point of insanity for average families; not to mention fewer foreign visitors.

But my primary concern was regarding the 'streaming video' and Television (ABC and ESPN, which might get spun-off) sectors. I viewed (pun intended) linear television as struggling for a long time, and found it interesting that CEO Bob Iger forthrightly acknowledged that in an interview yesterday. So I'm glad I had that right; but I'm right here in Florida and could pick up on some of that. It's not political as much as it's 'price' and currency exchange rates too.

As to the TV aspect, well the 'Actors Strike' just complicates everything with the few remaining scripted programs on the Networks well into production for the 2023-2024 season, and just came to a complete halt. That full stop likely won't last long; but if actors are overly concerned about AI lookalikes, well that troubles me, because most of 'Gen Z' doesn't recognize my Generation stars; so maybe AI would just create a new series of celebrities; not actually human (although some actual humans could sure fool me if told they were 'fakes').

Bottom line: our outlined pattern progression persists, as it mostly has all the way from the 'inverse head & shoulders bottom' last Fall. Money managers as well as technicians constantly call for declines that don't materialize for long.

So now I think you'll get to (not quite) to one of those structures that allows us to agree; however there will be (barring over-weekend fiasco events) a sort of fakeout-breakdown followed by fakeout-rebound, followed by defensive S&P, perhaps irresolute or in a high-level trading range at best, pending the FOMC.

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Market Briefing For Thursday, July 13
Market Briefing For Wednesday, July 12
Market Briefing For Tuesday, July 11