Technical analysis here - isn't like weather satellites overlooking hurricanes. It is not yet possible to ascertain if this move (impressive on the surface and a part of the reflex rebound we've looked for) is the eye of a hurricane or storms have already passed. The bias is slightly for an extension; a retracement and then higher seasonally as we've already outlined. What's impossibly for now is to ascertain odds of going below S&P's 50 DMA which we bounced off of.

While 'money and liquidity' argue that money managers have the ability to get this higher (and will for the moment); inflation data isn't going away; so now of course we get a segment of players who will argue it doesn't matter; just look at how the market roared back. Ah were it so simple; it's not and it matters.

If and as you start getting an inflationary spiral, especially as it encompasses a wider swatch of the economy, you do get relative safe havens (tech stocks less than dividend plays); the argument falls apart if the interest rate uptrend continues. It's not just 2% 'red line' on the 10 year; but the FOMC meeting as well as how policy will be perceived. Markets will watch in advance.

Sure, some tech stocks will do fairly well regardless (Apple may be one); at the same time those that rebounded today 'because' crypto rebounded'; might actually be less enthused. That affects the perception of semiconductors and the real association between crypto-mining servers and graphic chip demand.

Most important this past week of course was the CDC lifting restrictions from a moderate viewpoint. The VIX destroyed anyone that chased the decline; at the same time so far you have a successful rebound off the 50-Day Moving Average for the S&P; plus you have small-caps and even Oil participating. In the coming news-sensitive week; you almost have the last chance to exhaust the rebound and have it back-and-fill, prior to our expected seasonal rally.

Next week will be helped (not hurt) by continued stable-to-firm Oil as it's been at the epicenter of this move for a long time; since the noted lows under 40.

Commodity prices are up significantly; and booming markets (tied to these as well) really depend on emergence from pandemic; mostly a work-in-progress.

Also you have a lot of retail sector earnings reports; and that could make or of course break a few patterns. One people point to is Macy's; as a symmetrical as well as coming-off a head & shoulders bottom. So technically that argues a breakout to the upside; but 'if' they miss numbers while giving good guidance (as one of the few integrated retailers left) you could get both a shakeout and then a move higher.

So once again, bifurcation is alive and well in this market. Got our breakdown and 'automatic' rally off the 50-DMA for S&P; while many momentum stocks if one looks at overall charts, appear to have rallies in long-term downtrends. So it's tough to be too optimistic especially for companies that don't benefit from a broad reopening of the economy.

Just pointing-out one easy to view equity technical picture in for the most part a market that has lots of stocks wanting to extend higher; but at this point this remains a broader market as was indeed primed for a bounce off the 50-DMA which is an absolute minimum decline area (many former tech darlings are off a lot more than 5%; or at least were; so now they make the last couple days, sort of, vanish (just like the VIX reflected).

We're not so sure and recognize our view includes a seasonal rally from later May into early-mid June; but not so sure that a solid interim low is achieved. It may be only because money managers might have no choice; otherwise they face financial ruin in some cases; so if that's the case, they'd rather be late in a move than closing their hedge funds (both painful; one terminal as most of them are dangerously over-leveraged).

So yes our view about late May / early June continues; just a question of how we get there. Stay tuned.