'Secret talks' - between The While House and Putin's Kremlin aids, to avert war been the nations, is the least reported and possibly most important of all stories, of which there are plenty to contemplate.

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The Elections and after that the latest CPI numbers are influences, but probably neither will be surprising.

Sure, whether China's Covid policies seriously constrain Apple production of iPhone Pro's (again the benefit of getting it at introduction if inclined), or how much 'split-ticket' votes impact Election results all matter, but peace vs. war is perhaps the defining issue which too many have become accustomed to (the war) as an ongoing situation. End it and you just change market dynamics.

There's been so much negativity (based mostly on inflation and Fed trends), it has actually been justified, but became a crowded corner to concentrate trade approaches, and that's why being excessively bearish has come with a pain.

This week the CPI becomes more important than the Midterm Elections for all practical purposes related to the market(s), however you could still swing in a multiple series of whipsaws later this week, because inflation hasn't broken, a reason for the Fed to pivot based on myopic glances at prices doesn't exist, at the same time the surprise could be some progress towards stopping the war.

A majority of the decline has come from expectations of higher interest rates, and inflation. However I contend that the projected rebound from the depths of the pandemic, ran into 'chasing' and then 2021 buyback insanity, which as we pointed-out, led to historical insider selling. Anticipated hysteria followed.

So far the market rolled-over before earnings got hit. Currently analyst tend to target Recession in 2023, because 'earnings' haven't been hit 'enough'. Well, lower multiples with lower earnings would be attractive, but can take time. But unless inflation comes down faster than expected, fiscal policy fight monetary policy (you see that already, based on 'entitlements' indexes to inflation and a huge infrastructure program)... you'd likely be a higher rates for probably a long time. The Fed could find itself compromising on it's 'inflation target', and while ultimately that would be realistic, it's probably too soon to look for that.

In-sum: 

market upside is not surprising while the secret talks with Russia also are presumed to have happened (recall the Defense Secretary speaking with is counterpart in Moscow, which essentially had to relate to just such caution).

Current comments need no great expansion, most big-tech and software as well as Semiconductor stocks got creamed, traders got negative well after the peaks, and it could be months (and sensitivity to China) that determines price for the Index. On individual plays, to the extent they are not shuffled around in disregard to their fundamentals, there can be satisfactory rebounds. Much of that has occurred in fits-and-starts over the last two weeks, and may persist.

There is 'slight' trend-following ongoing, such as Tesla's (TSLA) downtrend (which I'd warned of for probably 2 years), or AEHR's uptrend (bullish pick of the year all the way from 6-7 or so, and added around 12), which is near breaking out too.

Oil benefits with the prospective Election outcome, despite gridlock. Markets have tended to move up, not down, overall in the wake of Midterms. Oil might not sustain a move however, because if it's perceived production incentives at some point will increase, that will infer more inventory and the ability to halt all reliance (or manipulation) on or of the Strategic Petroleum Reserve.

After Election Day: 

You'll not get prices plummeting yet, entrenched wages as well as spending packages (as if Government fighting itself) part of that. But if you slide a bit in Housing / rental data in Thursday's CPI that could dilute part of the inflation-risk aspect. More significant would be actual 'war' negotiations.

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