Soft landing, hard landing, or no landing - that is the question. Whether to 'fight the Fed', or realize that the Fed is fighting the natural desire of investors, primarily, to advance their wealth, to see the Nation do well, and to thrive.

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The people have been interested to buy 'probable' survivors of prior carnage, irrespective of monetary policy and economists or politicians trying to inhibit the Nation's revival. It's also wartime, whether by-proxy or not, and that's not a time for Government to be suppressing growth by over-correcting their fault in keep rates low for too long after the pandemic emergency was ending.

We identified the 'inverse head & shoulders' bottom that took months, and as I noted .. the longer it takes to construct a bottom formation, the greater should be the ensuing advance. It might not be so simple, but with a couple sprinkled stocks going broke, another couple iffy, with the premier picks doing just great . . . well that's just about how we expected things to pan-out. It's a process.

Now we go into Expiration, which will be different because of January's rally. I noted that the 'nearly unanimous negativity' set-up a lot of Call writing during a higher market, as the fund managers anticipated good income from writing, and thought they'd then take the income 'and' hold stocks after options expire worthless. A 'funny thing happened on the way to the forum' for some stocks.

If you're a conservative investor just realize that February has 'parts' of it consolidating as others rise. This whole process is not only fine, but exceeds expectations in a few ways this week. Money managers and investor skeptics have fought market strength and I've forewarned of that for a few months now. Not to criticize, but of course there are areas that will do better (like Semi's over Banks just as an example) and I knew that many would 'clear the decks' in December as part of trying to prepare for 2023 and knowing most upward action's in the 1st half.

That's part of why I couldn't understand the logic of focusing on rates or drops after so much of the Fed's series of hikes was 'already behind' everyone knew the restrictive policies, and many stocks that could tank had already done so.

Now we get into Expiration and if it's higher (never know what wrenches may show up 'if' certain entities want things to get worse not better) next week will likely be up too, before some setback again. But setback in a continued Bull Market trend, as we've suspect this has been from October, which last chance 'in not out' being tax-loss related selling around Christmas. Like I speculated at the time: those 'lumps of coal were going to be compressed into diamonds'.

One good thing is that there remains 'doubt'. Nobody I know is ecstatic about the market, and I'd worry more if they were :). For now, after 2 routine medial appointments that took a lot of time, we'll wrap this up and more tomorrow. It's a neutral market except for where it's 'better', and that's rather pleasing.

Basically be on the prowl for more upside, Expiration is nominal not Quarterly, but again very heavy writing took place last month, but many of the managers likely wish they were straight long the stocks instead of milking premiums and trying to convince investors of a stock's detractions, rather than its attributes.

There are stocks with issues, Ford (F) comes to mind, but that's part of transition from ICE to EV, and at least they're being candid about it. Am I enthused to hold it? Nope, already said that. But every time Ford gets clobbered it comes back down the road, and I suspect it will stabilize and find traction especially after the neurotic pundits finish selling. I did acknowledge GM as a better pick.

One without issues is AEHR and again it's an aggressive hold, not chasing it, let those option writers figure out how they're going to reposition if shares are called away, since they know this is 'potentially' a multi-year wealth-builder. In the case of newer cheaper 'specs', a couple may become that, but too soon to draw that conclusion, but within a group like (2nd favored and target-reached for now) SKYT, or newly added BigBear.ai (BBAI) or Quantum Computing Inc. (QUBT), the potential is there, but only if they execute well, which AEHR already is doing.

Bottom-line: 

Aggressive neutrality prevails, so with this backdrop a few of our stocks are excelling, which might imply even higher after upcoming Expiration meanderings. Certainly the S&P (SPX) could settle-back after that, but not a lot and it's pretty clear that negative portfolio managers are getting more nervous as they continue to miss the trend unfolding and continued process for months.

More By This Author:

Market Briefing For Wednesday, Feb. 15
Market Briefing For Tuesday, Feb. 14
Market Briefing For Monday, Feb. 13