'All the marbles' are on the table, some believe, if next week's Jobs report is particularly strong. Then you get another shift toward belief a 50 Basis Point hike by the Fed this month; and so on. That impacts S&P fluctuation the most.

Perhaps more pertinent is: that this week's comeback from the combative but resilient 50-Day / 200-Day Moving Average 'intersectional zone' survived very well. Small-cap stabilization was welcoming; plus wild Tesla-related swings in semiconductors.

Regardless of technical antics, over-optimists, or permabears, this market has adhered generally (while tricky to trade for sure) to our outline: 'inverse bottom late last year'; January Effect rebound; February erratic contraction; setting-up for Spring rally, which may or may not make all of this a 'cyclical bull within the secular bear', which I think is nonsense, believing the 'bear' ended last year to retreat into hibernation, barring changes to the world beyond assessed as yet.

Hard to say if 'faster, further, freaking' is the 'go big' call by a WSJ reporter for the Fed's rate approach. Likely 'more hawkishness' persists as the ongoing mantra as Fed Chairman Powell appears before Congress in a couple days? It won't change a market's penchant to look forward; even if Fed looks back. I point out that most inflation peaked last Summer; while part is entrenched and neither have much to do with monetary policy given external circumstances.

Will he react to old data with any sense of urgency (probably) or be meeker in that the Fed doesn't really know a point where the Fed actually breaks things? So rate expectations remain higher; things are still robust; and they should be by the way; again, given stimulus, infrastructure and 'war'; so it's really hard to imagine why anyone thinks this monetary policy will really 'cool' inflation when the Fed is not only fighting 'citizens' trying to make money; but Congress and a White House hellbent on spending, not saving, and remaining profligate.

Perhaps markets should consider implications of China restricting capital flow as one bullish factor for America and EU asset classes; as desperation again characterizes urgency (it may be a 'trigger warning') to worry about the CCP.

In sum: we continue to see both 'disinflation' (like Costco pointed out); autos selling off (used prices as new volume increases and easing supply-chains do allow fulfilling backlogs and we've mentioned this for weeks) and inflation (as I don't envision how anything other than entrenched wages and prices prevail to a large degree; especially in sectors that benefit from Federal spending).

Based on cyclical historical patterns, we don't see great deviation from what I have contended for months: inverse 'head & shoulders' bottom last year and a slight increase in economic activity that is cyclically normal; but being fought a good bit by a monetary authority hellbent on impeding inflation.

We get that, but believe some Agriculture and Energy prices relate more to an ongoing 'war' and the resurgence of demand from China than anything that's able to be controlled by the Fed, aside from risk of the Fed adding to troubles.

What's happened in the Bond Market over the past couple months; since the October low / washout we indicated, is a peaking of inflation that is long past. If you concur that inflation will back-off, regardless of Chairman Powell's talk this coming week, you probably have to allow for 'double-dip' recession; but it is not correlated as much as some others contend with stock market decision-making; and that's something I've pointed out for awhile.

There's not much of a margin of safety in big stocks; more so in surviving tiny or small caps that don't need to hammer their shareholders with dilution; thus have good prospects of muddling through this. First surviving; then thriving. If we do get a recession (I'm skeptical because of the big spending by Congress and so on; not to mention quasi-war going on); it may very well be mild and a glitch in history when you look back on the charts a year or two from now.

Bottom line: We have Fed Chairman testifying; a Jobs number; and at least a bit of a 'cushion' for the S&P to navigate above the 200-DMA at least for now.

I actually think traders added a bit of fuel to late week action to create that just ahead of the Chairman's talking, so as to mitigate not a shakeout, but to dull if not prevent, any real challenge to the past weeks low points.

Inflation is not just a 'seasonal anomaly' or a wage-price spiral. The argument about incremental rate increases in excessive not because of strong data but because most of the influences are not merely correlated to monetary policy; unless the Fed wants to risk breaking the economy. The Home prices lower; rents; lower (a bit); shipping prices plunged (noted recently); and that's what the Fed wanted; and even China coming online helps keep supplies cheaper.

Basically the Fed can do more harm than good at this point; services are core to what the Fed watches; but again they can't get this rate much lower than is implied 'trending'; but what they can watch, not what economists imagine. So even Case Schiller is declining; reinforcing our calmer view of recent months.

Yes people are debating if this is a new bull market or not. Actually deliberate rebounding of the S&P has little to do with the genesis of a 'Bull', but helps it a bit as far as structure of patterns evolving from our inverse 'head & shoulders' low. Sure, upside will accelerate more meaningfully when the Fed eases back a bit; and of course the optimal buy points for many stocks will have passed 'in theory'; but there will always be more opportunities. For now we continue a focus (bit more complex) on selected potentially disruptive innovative stocks; of which not all will work-out; some will collapse; as ideally a couple will sprint.

Tricky week ahead for the 'Index'; likely higher week for speculative stocks.

More By This Author:

Market Briefing For Thursday, Mar. 2
Market Briefing For Wednesday, Mar. 1
Market Briefing For Tuesday, Feb. 28