E Market Briefing For Tuesday, Dec. 8

Idiosyncratic behavior is really continuing benign overall action as the S&P has shown for weeks. Frustrating as this is, and counterintuitive to any sort of comfort about putting money into the market (aside knowing the Fed remains on the Bulls side), this is clearly 'not' the omnipresent broad strength beyond reason, as so many strategists content that it is. It's up there for sure, but that is not to suggest it can't extend. Too risky to invest in the super-caps now? To my way of thinking yes, but that's not the same as playing the bearish side.

No mistaking reality: it's the concentration of capital into a narrow universe of primarily the same (usual suspects) stocks that have been in-command of the Senior Index and NASDAQ overall since the March lows.

Yes there is stress amidst ever-present froth for awhile now. Of course a level of pullback of more than a couple percent would encourage more optimism as regards the so-called 'post-COVID' era, but even that has been pushed forward to a later date (when people get realistic about when vaccines will distribute in a broad way, 'even if' one presume the near-total efficacy that many have real doubts about.

Yet by the Summer's beginning, you won't have half the population vaccinated yet. However once we get close to that, and/or have readily available antibody therapeutics, both affordable (which means mass-market scalable production) and ideally convenient, people will start mingling and traveling more (they now try doing that it seems, which is why local governments crack down severely).

Hence the question remains: are stocks ahead of themselves? Some are for sure, but others are just vacillating. It's even possible that 'if' the big-caps finally get a shakeout worthy of the term, it might be related to taking some gains 'this year', if holders fear higher tax rates next year. However I suspect some of that concern is either shunted aside, already seen in an earlier minor shakeout period this Fall, or negated by confidence it isn't going to happen given the likely structure of the Congress next year.

So, this remains a unique year bifurcated in many ways, during which since a March low-point, there have been a handful of minor shakeouts, even one in which I was hoping for more of a decline that what we got for the S&P. Thus it has proven unwise to short this market, even when we were ready for 'fades'.

While 'don't fight the Fed' or the trend has remained appropriate, this is now a very expensive market with regard to the super-caps, not so many others.

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