An inevitable Fed pivot - is not a panacea, but it depends on circumstances. This market continues to struggle as it managed to hold Senior Index traction on Wednesday, primarily because of rebounds in S&P-leading tech stocks.

Consumer Spending up, Consumer Sentiment down, that's the 'mixed' scene in this economic environment. It's not just about essentials versus luxuries of course, but discretionary spending versus those not worried as beneficiaries of infrastructure spending or what have you. Or if they got killed in crypto.

There's historical precedent for the turnaround we got this week, projected as well as reinforced by the market's 'lack of response' to Japan's monetary shift on Tuesday. We had looked for a 'turnaround Tuesday' anyway, but absorbing the news from Tokyo in that first hour was a sign affirming the forecast rally.

It's a tough consumer discretionary environment, and it's just broadly tough. If the war goes into a Russian/U.S. clash, we do get a meltdown, but it won't be because the permabears or naysayers expected it based on economics. That argument is really for a year ago as pandemic stimulus faded. Now a lot may depend on China emerging from lock-down and increasing 'their' consuming. And of course that directly will impact Oil prices, in a different way than 'war'.

In-sum: 

This week continues to really reinforced some old Wall Street adages: a) never short a dull market, b) don't get negative when it's a crowded short-side, c) respect the historically dominant year-end tax-selling exhaustion and d) allow for snap-backs which won't clearly define where things go next (yet).

Plus don't expect it to hold unless the Semiconductors at least get a rebound. And notice the market ignoring or reacting to bad news (like BoJ) just briefly, as well as small-caps seemingly about done with tax-loss selling and stabler.

S&P made it to ~3880, which is about all I expected from this move. However a bit more should on-tap but you can see a struggle that underlies this.. much is not related to 'Nike' doing well, but just ongoing year-end crosscurrents.

The rebound for the moment probably has limited room to run further though it certainly should try 'if' the political backdrop permits. By that I mean 'if' the perception is many more months of war, people in the US might start to think like those in Great Britain: stop focusing on consumer demand to smell the coffee and realize there is post-pandemic rebound fatigue rushing to a 'wartime economy' which essentially would be just shy of rationing things.

I don't want to overemphasize the war, but I don't think I am. The dynamics of a war, and costs, are intertwined with consumers, even if they don't feel that in this Country, because we're (so far) only indirectly involved. Ukraine has sort of an advantage, while Russia goes to rogue states for missiles, drones, etc. It is a scenario that could go either way, or Russian could kick Putin out too..

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