'Watching paint dry' - is what Tuesday's trading appeared like, but it's not so simple really. For one reason, and it's not the Fed at least for the moment. It's so bifurcated (techs up, Industrials down), that I smell a Wednesday rebound.

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The reason is a barely-engaged battle at the 'declining trend-line' that's been in-effect for a long time. And while I am not opposed to another shakeout for S&P (SPX) in the weeks ahead, I have leaned toward the idea of breaking-out from the resistance at least temporarily. Notably some areas already have done so.

Market 'possibly' took note of one story today that financial media might have missed (impossible I'd think). My understanding is that George Soros had a dispute with Schwab (who runs the WEF) and pulled-out of Davos today. He'll give a speech in mid-February instead. Also today, Henry Kissinger (gee it's all guys who were elderly in my eyes when I was just a kid) advocated urgent consideration of admitting Ukraine to NATO. That might get Putin's attention.

In essence I'm with Scott Kirby on this economy: expensive but people cope. Well my words, but his sentiment, and relates to under-investment in airport (not aircraft) infrastructure, automated aircraft handling systems etc. But the point of his increasing United's guidance means more regarding the economy and is in-ine with my view that second dip or not, the worst is behind. That's of course not to say we won't retreat at some point soon (VIX emphasizes that), but so many expect it, wouldn't it be interest if that's another shallow decline. I know, it's Expiration week and the trend-line battle.. must focus on that first.

Capital markets are not very busy, backlogs are down (Citi emphasized that), people are adjusting to higher rates (which have come down a bit from peaks) and Goldman had a tough quarter mostly due to their Apple Card operation.

As financial analysts mostly fret about bank results (Bank of America did do just fine), they are also talking about the dour outlook at Davos this week. Part of that might relate to one major Swiss bank indicating financial pressures for them, which might have affected cocktail / hot toddy gatherings in Davos :).

(To correct the above: BMW plans an EV plant in Hungary, batteries Munich.)

In my view the more important stories were China's better growth emergence, or rather return from lock-downs, or pretty decent U.S. economic activity that tends to mitigate focusing on the negative or even 'fighting the Fed'. However the Fed does continue to loom as an inhibition to more substantial upside.

Notably our so-called 'frienemy' Saudi Arabia, expressed interest at Davos in trading in 'other than Dollar' transactions for Oil. That's troubling, but expect nothing truly constructive from the group that generally funded Islamism for years, and for that matter wrote the updated Koran which is a total distortion of their own religion, but I better not explore that subject. The best anyone is able to hope for would be not in Saudi, but Iran, if the people dispatch their own immoral and unethical theocratic government.

And we have Bitcoin (BITCOMP) over 20,000 again, can't help but ponder whether that's a response to the dour mood in Davos or threats Saudi made on the Dollar. It may also be worthwhile to note the tightening actions of Bank of Japan.

Canoo (GOEV)

In-sum: 

I doubt many views were changed by anything occurring Tuesday, as it was just jockeying for position, as favorable news came from China, crazy moves from Japan (effectively tightening after ludicrous rapid easing), and we have Davos telling us how bearish everything is (same Wall Street bosses of most of the major analysts), and we have an Expiration coming right up.

As to the idea of an economic 'cycle ending', yes in theory but I suspect we've already been in recession and should be looking for growing emergence, not submergence. So far the technical 'erratic complex bottom' (sort of an 'inverse head & shoulders') prevails as a break of the noted October low is something technicians can speculate on, but that's not how S&P's behaving for now, not so negative, although it is indeed short-term streatched.

S&P is just cruising around in circles shy of the 4000 level. The 400 point DJ drop is not signficant, but does count as a 'rebuff' for the moment. I hoped for a dip and turnaround trying to move over 4000 in the Cash S&P, and it tried but couldn't achieve it. At least not yet, and will try again tomorrow.

The problem is 'news isn't bad enough' to increase pressure on the Fed, and a challenge is we are moving into January Expiration in a couple days, with a disparity in different stock's behaviors depending on Put/Call Open Interest.

A couple economic summaries (like New York) are fairly sloppy, but other influences like travel, and forward plans, are still favorable, which is not what the Fed wants to see. For instance United Airlines talks $10 for the year, not a more limited $6.40 consensus. (And that tells me Delta should do well too, while American is busily looking for the correct runways... poor humor as that was a very close call that should not have happened at JFK the other day).

The consumer is resiliant as long as the labor market is tight, and it holds and doesn't break, well I'm pretty sure the Fed is looking at that. But if analysts do merely follow the Fed we'll find that demand is held down somewhat, but the catch-up would be pretty swift once the central bankers open the bar back up.

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