Is there a FOMO rally in the wings? 'Fear of missing out' is already gnawing at the heels of 'under-invested' or bearish money managers. They are really getting freaked that persisting negativity is not working for them in 2023.

So is such a rally coming? Probably not immediately; although an initial attack on S&P 4000 should be on the menu in the week ahead; before a shakeout. If news is cooperative you might not get much of a shake; but after a favorable viewpoint about early 2023, it's necessary to not get excited after an up move.

However, yes, there are many stocks that would only retrace portions of their recoveries or revivals; and a few that will do well even while S&P retreats just a bit. The catch is 'not much' if indeed it's going to be a 'FOMO' rally where at least a number of major money managers who did poorly last year miss this.

This weekend since you know we've believed S&P would tackle resistance at the same time skeptics would constantly help fuel the rally (crowded shorts as well as denial that again they missed an opportunity to enter at bargain levels which won't be tested, but be approached in an eventual shakeout). Anyway I am going to sample some charts of the new speculative 'sprinkles' (avoiding concentration); while also noting our 'pick of the year for 2022' (and continues into 2023) Aehr Test Systems (AEHR) is doing mighty fine. I think Wall Street is just figuring out what AEHR has its hands on, and will expand interest realizing it's maturing into a mainstream (rather than niche test) company in Semi's.

I'll also mention our 'runner-up' pick SkyWater Technology, doing fine too. It also is in a breakout posture and we'll see what SKYT can do (7 was a gift; and reasonable near-term goal is 10-12; and eventually higher than that). But for AEHR, have no idea: gets acquired or they just keep executing.. 50-100 ?

A reminder again that nothing has changed with either the approach this year of expecting slowing inflation; a quandary for the Fed; dubious prospects for a ceasefire in Ukraine; more tension in the Middle East (Iran); firmer Oil (got it); or selected semiconductor recovering leadership roles, which we are seeing.

In sum: S&P is fiddling with resistance at 4000; and it maximizes uncertainty both as the VIX declines to low levels, S&P probes resistance; and FOMO is a background fear among virtually every analyst that disagreed with views like mine, which emphasized rebound behavior regardless of 'mean-reversion' in the other direction, which might loom as we get to late month or February.

This report will be short; remarks in a few graphics, and we suspect more of a fight (including upside S&P 4000 or so) in the abbreviated trading week; which ends with Quarterly Expiration.

Money managers and pundits are talking about a setback coming and I don't entirely disagree; it's part of our outlook for 'after' a favorable early 2023 S&P move following initial shuffling right after New Years. The S&P is above most moving averages; including the 200-Day; and hasn't done that for a while.

The technicals are set up well for both a completion to 'this' phase; but only a modest setback, which will then ease a daily overbought and very low level in VIX. As I've said, that's coming, but not yet. We may get some squabbles for Expiration; since there's a large crowd in 'January Calls' with a 4000 strike. Of course I'm not fiddling with that but could trigger some bidirectional volatility.

So we're not getting overly comfortable; but definitely not uncomfortable as of course the FOMO crowd is praying for a decline, because they're generally on the sidelines and missed this decent move for a few days.

Mean reversion for sure is what we should look for within a few weeks; but as they (the managers) are mostly committed to bonds, cash or so-called safety plays, they are not expecting this favorable first half of year action we targeted as part of being contrarian and also because it made sense based on facts. It was already obvious inflation was ebbing; consumers are stretched but still in the game, and China is attempting a reopening, which is part of why we have a slightly favorable view of a couple stocks during business there; although for sure askance given their history of accounting gimmicks and misstatements.

Bottom line: We've called markets generally on-the-mark for a couple years (actually longer); and it's not easy and it's very hard to make a buck trading it. I'm glad that we've had a couple decent stocks (including the absolute best in tech) and I'll be satisfied for reasonable performance from a couple new ones. It remains a bifurcated market with a focus on 'active not passive' investing.

Several new picks fit the 'sprinkling' admonition; diversify and be happy if one or two work out, and recognize you'll have to deal with the others; or don't play anything speculative. Importantly we warned about certain mega-techs, which can rebound too of course; plus nailed Oil's moves as best feasible.

I'm fatigued from working too much; and may reduce both the Daily quantity and frequency a bit; that seems advisable. I keep saying that; but don't do it; I apologize as one of our 'space engineer' friends thinks I need to take it easier. I think the recent accident (got rear-ended) was also disruptive. At least I'm in Florida and all things considered, that's a good place for light rehabilitation.

So bear with me..I'm doing what I can; trying to keep informed on more stocks than I'd normally try covering. Note I shouldn't be anyone's sole idea source. This past week reminds me of that. I try to blend fundamental, technical and psychological views; and continue to do that. I don't have all the answers. I do appreciate your being with us; and value your occasional input.

Enjoy another long weekend; and join us for upside ahead of Expiration. Just maybe it will be fun! There are so many institutional bets on the downside; as that can squeeze some traders stuck in last year's mindset; or not 'with it'. Of course this 'run' leads to a shakeout; but perhaps after shorts are wrung-out.

More By This Author:

Market Briefing For Thursday, Jan. 12
Market Briefing For Monday, Jan. 9
Market Briefing For Friday, Jan. 6