Wall Street bearishness - is unusually excessive, for this time of year. Most stocks were previously pummeled by what ought to be sufficient degree, lots of money managers did not participate in the more recent rebounds, and few are recognizing what we've called (rightly or wrongly) an 'erratic bottoming'.

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Obviously we could get a Tuesday rally extension if CPI shows lower pace of inflation, and then it pauses again (probably) before Wednesday's FOMC hike that's so widely expected. That also means it's likely discounted and you have a reasonable probability of a 'relief' rally that follows these.

At the moment, there is divergence notable with VIX up a couple 'while' S&P zooms forward. Means traders distrust the advance, of course. They're mostly bearish or even short, which is possibly the most bullish short-term thing one can say, but don't want to overemphasize that. The consensus continues with a lot of calls for moves below S&P's October lows, however so many stocks, as I oft note, are so far down that it's hard to engineer that kind of plunge after the fog of the future is clearing a bit (China, the Fed, etc., all a bit less fear).

'Technology' of a disruptive nature, way beyond just AI or VR: 'nuclear fusion' is actually a priority for investors and also Government. I did not know the UK media was going to 'scoop' Tuesday's announcement, but I think it's important to recognize the significant achievement achieving nuclear fusion represents.

If this breakthrough (the scoop was London's FT) really is replicated, it would ultimately give the world the 'clean energy' it dreams of, but there's difference of course between 'scaling' this discovery into applicable widespread viability.

Besides 'changing everything', the fusion concept has to be managed (yes we think of semiconductors way beyond EV's, data-centers and so on), it involves chips (Silicon Carbide which has shown power conversion advantages) and of course lenses and lasers, so we'll see what companies 'shine' when that time arrives, which is basically not yet, but hopefully a bit more in my lifetime.

Also when I mentioned Government(s) I should the 'trillion's' asked for at more than one conference, and it's not just for rebuilding Ukraine after the war ends (as it will). Funds are being organized for a sort of global transformation that is not discussed much, but if 'nuclear fusion' successes are replicated safely, reliably, and regularly .. well that's the biggest disruptive technology since the Internet. As it would also enable very reliant electric grids, with technology led by the USA, well, it's a very big deal. But again, let's see what they announce.

Meanwhile . . Energy and Oil were solid for now, and were manipulated lower by the 'price cap' purportedly to deter Russia financing their war, but maybe a bit more for the U.S. Government to affordably replenish Strategic Reserves. Recall our suggestion that Oil, like markets, would be defensive then higher.

As China recovers and reopens, Oil demand should increase, hence I remain skeptical of analysis overly negative on Oil price prospects for next year. Sure I do understand Treasury Sec'y. Yellen's '60 Minutes' remark about limiting the revenue Russia can obtain from Oil, but as noted I think it's more than that. At the same time we hope her admonition of doing this without recession, works, although I've felt the Nation is 'partially' in recession, and Europe certainly is.

In-sum: 

Expectations of a 'soft landing' are what dominates optimism, which itself is very limited for now (unusually so for institutional firms). Mostly they are showing negative bias for what comes next.

So I'd only fade strength possibly if we get a big upward extension, and might be inclined to buy if the number has virtual similarity close to last month's CPI, and that would tank stocks briefly, but also probably not sustainably. So it's up in the air daily-basis, but still feasible to see a more buoyant outcome.

It's a tense environment due to the lack of clarity, but that may change both if we get a helpful CPI and a friendly Fed, but of course we don't know what will be said by Chairman Powell. What we do know is that contributing factors like some commodities, Oil prices, and transport costs (including diesel fuel) have been declining during the preceding weeks. CPI should reflect some of that.

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