Strategizing trading in this market is virtually a fool's errand, nevertheless a lot of folks continue debating the trading dynamics 'as if' to catch anything of an important nature.

Pixabay

We've call for general rebounds and renewal declines, at the same time we have indicated ~3800 S&P remains in our sights, barring of course either a ceasefire in Ukraine, or a reversion of China's policies.

To those, that latter seems more likely, given Beijing's confusing dictum today of both helping business growth, while suppressing COVID-19. They can do it if they end those shutdowns, but they've only imposed them this week, as for in the capitol, which is reacting much as Shanghai did in the early days.

In any event, end those shutdowns, while concurrently contracting with either Pfizer (PFE) or Biontech (BNTX) for a 'real' (if limited) vaccine, or the Merck or Pfizer pills, and sure, you actually relieve a lot of the concerns that impacted that market.

I should note we're referring to the collapses of currencies in China, indirectly in Japan, relative to the continued projected strong Dollar. The media reports on these individually and generally has not tied Dollar strength to flight capital resulting from the COVID crisis in Asia. And sure, if peace prevails in Ukraine, in time, and 'if' China reopens, you should see commodities flow increasingly, and that might offset the increased demand pretty much everywhere. That of course won't relate to the impact of worldwide drought, which is presumed.

(I meant to say short-range laser developed with Israel in testing, long-range laser systems likely in the future, intermediate only on a few Navy ships now.)

Last week I expected the USA to announce greater availability of Paxlovid for COVID, and that indeed occurred this week. It's the same antiviral pills I noted a few weeks ago had saved my friends returning to California from Mexico on a trip I had intended (but thankfully avoided). They had COVID immediately on return and both were previously vaccinated and boosted. They got the Pfizer pills, and in one day were dramatically better. I suspected the public heard so little about it due to lack of inventory, and that seems to have been borne out.

China could use this antiviral pill, except that the supply is woefully insufficient for their needs, although it might be enough to help them .. oh in 2023 or 2024 by which time other regimens will have been trotted-out, even better vaccines.

The situation with Russia is incredible. Looks like no big UN deal is achieved, at the same time Europe and NATO are gaining backbone daily to confront a Russian fanatic. This is both appropriate but also dangerous of course. Many references abound to the 1930's appeasement of Germany, but there were no nukes back then. I tend to minimize the nuke risk, because fallout would likely go directly to Moscow, given the Jet-stream's West-to-East drift.

Meanwhile it is reasonable that Ukraine's intermediate range ballistic missiles hit both of their targets 'in' Russia proper today, an Oil depot and a big ammo storage facility. Without of course ammo and fuel, the Russians cannot prevail in their aggression. Remember the 'Battle of the Bulge', the German goal was not just to encircle Bastogne, but to capture the nearby fuel depot. They were blocked on their approach and the 'panzer' tanks basically ran-out of fuel. For sure Russia has better logistic supply lines in the Donbas, but their managing of it is so poor that they are actually outclassed in technology by Ukraine.

It's the cut-off of 'gas' to Poland and Bulgaria that gets attention, but not that a handful of other EU members 'are' paying Moscow in Rubles, which is omitted by most newscasts. I'd guess Hungary would be one.

In-sum:

We have a rebound looked for, with dubious sustainability. Russia is on the front-burner of course, after Foreign Minister Lavrov yesterday insisted that Russia in no way wanted to drift down the path of nuclear strife, with what he dubbed Western 'proxy' forces battling Russian troops in Ukraine. Then he added that the risk was 'serious, it is real'. True, but he and little Putin truly are doing little themselves to extinguish the big fire they started. Also, yesterday's UN entreaties for an immediate cease-fire so far got virtually nowhere.

This week Russia seemingly officially declared that they're going to try taking Odessa and then Moldova. But it looks like some EU politicians are still going to try appeasing Putin. However the majority of Europe has found backbone. Putin is 'Satan' as he hangs nuclear threats over Europe, including a missile able to carry 15 warheads, or enough to instantly decimate the UK or France.

Stocks are continuing to ebb-and-flow in the vicinity of recent technical levels of note, and while we'd be pleased if the move gets some legs, that's not the odds-on prospect. Basically a bear-market rally and unless the noted issues are favorably addressed, or the Fed moderates their stance, most that get too excited about buying into strength are continuing to 'fight the Fed'. Although I agree that some low-priced speculations can be bought during pullbacks, not on the rallies, patience will be required, almost however S&P sorts out.

Overall.. this is a corrective process within an ongoing Bear Market, and false rallies are not just to be expected, but were and are the forecast. Worst starts of the year for S&P, and negative returns in the first Quarter or First Half, very frequently is not how the S&P (SPX) finishes the year, so something to remember.