Quadruple Expiration occurs Quarterly, and is thus truly 'transitory' (to coin a word of the week); and it was somewhat heavy because of Expiration, more so than due to St. Louis Fed's Jim Bullard speaking economic realities, which we already knew about. The St. Louis Fed is traditionally the data father, for a slew of Fed surveys and reports; but few are listening to responsible daddies.

Friday's decline was more about Expiration and technical exhaustion I noted a few times; and not about Jim Bullard any more than about the very high-level Chinese defector.

The Fed increasingly is believed to be 'behind the curve'; with the pandemic in a sense (or their response) continuing to guide their decisions looking ahead.

Quad-witching was heavy; our forecast has been for shakeout of the Indexes; and we have that. I'm still contemplating some sort of intraweek rebound next week. In other words, the sky is not falling; tail-risk is modified for business as they will envision some of the inflation as 'not' transitory, but enduring; hence a period of growth or building should persist; especially if we get infrastructure spending without absurd social spending; and more cohesion among people.

I'll address more below; and we'll see if Oil is firm then weakens a bit after the Tropical Storm passes Northeast of Louisiana and offshore Oil fields.

The global supply chain remains concerning; so some of that might be related for the near-term to whether any geopolitical crisis elevates Chinese tensions since both countries need each other at least for now (famous last words; as it is known from history that economic relations sometimes don't prevent crazy adventurist moves by an adversary ... there were US politicians believing that neither Japan nor Germany would seek war because of large trading needs in the 1930's and we all know where that led ... I wonder if young Americans are even allowed to learn that early Japanese Zero's and Mitsubishi bombers had Allison ... General Motors... rotary engines and were made of Alcoa aluminum). I mention that only as an example of not putting excessive trust just on 'trade'.

This week managed to be the worst week of 2021 by some interpretations; so while I don't think this is an important 'stress test' for the market; especially as its been correcting on a rotational basis for months now; it gets the honor. The sole reason it's not as big a stress test as it could be; relates to how correction activity has been ongoing in so many stocks for weeks and months. However, that's not to say S&P can't dive deeper, especially if they nail the Financials.

Ironically we were looking for this shakeout after early-to-mid June stability; as the general idea was for S&P to nudge into record highs; but only nominally in preparation for just what you're seeing.

Some say the market is overreacting to the Fed. Well, this was more technical, and too much energy is expended critiquing Chairman Powell or even Friday's comments by Jim Bullard. They were realistic, calm, and told us what already is known by sensible traders or investors (as to the Country's recovery pace).

So I envision some downside follow-thru Monday; but an intraweek rally from a lower low to a lower high; as we've discussed for a couple days. Then lower barring something that really salvages S&P beyond that; like firmer banks (not for now, they already moved); and rebounding Oil (that's more feasible).