Skepticism about detente - with China is one of the background pictures for next year; and comes into focus on a weekend when we hone-in on threats to our Nation, and to our economy. However, the Biden / Xi conversation wasn't what impacted this market; while a technical penetration did awaken 'algos'.

Of course the Judge's decision on the Epic / Apple litigation has both sides in the 'we prevailed' mode; which isn't the case for either. Apple won't be able to bar in-app purchases in 'gaming'; so the win for Apple was the narrow scope of the ruling, which didn't expand it (in terms of future action's case law using this as precedent) to include 'all' digital services. So Epic won; and Apple sort of breathed a sigh of relief (not the stock, which was entitled to correct).

Markets are aware of political, medical, fiscal and earnings challenges. Some of these may vary depending on one disruptive influence, and that's Covid.

Horse-trading goes on in the 'mega-cap' stocks; while lower price technology stocks are in our sights as far as what we 'might' be interested in as this Fall, including the long-anticipated market fall, unfolds.

Last year we focused on biotech a bit (and that worked-out, or hasn't; mostly depends on individual trader/investor decisions, given volatility both ways in a few); and required Banks and especially Oils to revive to hold up the S&P.

Capital markets have continued to attract capital; the buyback story is still live, and some momentum alternates depending on (I think) actions China takes to either free or further restrict stocks, fund transfers, and even travel for people in that stubbornly rigid society. They are more fascist in governance than they are communist; though there are aspects of Marxism still embedded. That's a reason I called the CCP 'commie capitalists' for a few years now.

In 2022 the challenge will be China. Oddly as they remain strict, money flows to 'perceived' safer (I didn't say safe, but safer) harbor in New York or even to London. The motivation of funds is protection from being frozen or owning securities risking being collared by Beijing showing their capacity to restrict.

Sometimes Beijing 'blinks', and you get relief. That's what they did this week. It is likely coincidental, but their stocks bounced when the Government dialed back a move that foreshadowed a potential junk bond collapse in-general. I suppose the CCP is more worried about the real estate bubble bust than the people complaining about their heavy-handed regulations on that, and more.

We are not invested in China as such; but any of several companies we follow have plants or facilities in China; or do business with them. Everyone seems to; and when things go awry, they find that it's not so easy to find adjudication in-favor of the aggrieved company, especially versus Chinese. 

After we all pause at least part of our Saturday to honor the victims of 9-11; a week of volatility looms. QQQ or NDX broke a little technical level; and DJI actually broke a steep uptrend; likely triggering some programmed sales. It's a set-up for more technicians to get negative; which can actually trigger a mini washout and rebound, before the S&P heads lower. Aside the technicals it's a fairly frequent September pattern, just at a very high level. And the big driver of where we go, or how long things are muddled, depends not on Covid as a disease, but how quickly we can roll-out better vaccines and antiviral drugs.

Covid is not going away on its own; and flip-flopping by a handful of officials has been ridiculous; you'd think they'd be embarrassed. Unfortunately that's a sign that they don't particularly know what 'best' to do; and also await drugs.

Quarterly Expiration dominates the coming week; so if we get a rebound after an effort to shakeout a bit deeper; the reprieve may well be just temporary.

• Going forward we want to touch on the new week: Quarterly Expiration is the highlight coming right after Yom Kippur; and I guess the old saw of 'sell Rosh Hashanah / buy Yom Kippur' so far is proceeding apace;
• Apple will present the iPhone 13 (more like a 12's' as it's a minor update compared to iPhone 14 next year) on Tuesday; and rumors suggest that Apple 'Watch 7' will be redesigned, but not ready for the Blood Pressure or Glucose measure (we might be surprised or that comes later and how it works is very interesting; as we're not used to BP without a 'cuff');
• Apple's stock is core to the S&P and probably rebounds on the 'Event', after selling-off on the Epic litigation outcome; that both sides call victory;
• Also note that declines in other key S&P components like Amazon and Tesla, contributed to the general heaviness (not surprising) on Friday;
• The overall S&P decline is not over and volatility might shuffle quite a bit around the Quadruple Expiration later in the week; we're probably seeing some of that already; as traders don't always wait for the last minute.