It's creator might know the cure - for COVID -19, as markets perhaps sensed late today, around the time I shared the story of China's authorizing inoculation of PLA troops (China's military) with their new vaccine. We anticipated another upward day anyway, so all this story did was resolve what had been a bit of an afternoon bull/bear tussle in-favor of the bulls, a daily-basis S&P outcome we'd anticipated anyway. (By the way, I was inferring China, not the Lord, as COVID-19's probable creator. In fact, if anything COVID-19 is 'the devil', so often poorly-handled it became an historical ongoing scourge upon mankind, drawing many into it.)  

So, personal satisfaction for getting this stock market right these past months will not offset continuous concern and empathy for everyone, though getting it right as far as the stock market, beats the alternative. Clearly not so much a sense of achievement as one of longing or fatigue, because there's a hole in all our lives, as well as empathy for those in a more dire situation. So, the 2nd Quarter's over and besides the S&P move being the best in 20 years (especially pleasing after catching the preceding drop prior to recovery) . . but it's all sort of bittersweet.   

Executive Summary:  

• After nailing March's capitulation and reversal, we got the best quarter in 20 years, however we grow more cautious as others get emboldened.

• The 3rd Quarter promises a few challenges, we all know about COVID-19, but how it resolves -if it resolves- matters beyond imagination, and even if we're to see 100,000 'cases' a day, that really extrapolates to more like 500,000 as you have to conceptualize what those positive tests really represent.

• Note that even with that it's unlikely we reached 'herd immunity' and that's no panacea considering the varying lingering after-effects of the disease.

• COVID-19 in combination with flu and measles if we don't have a therapeutic drug by Fall at latest, possibly incapacitates both our healthcare system and our economy (if it remotely hold-out that long). Perhaps the worst case won't happen and we get the drugs. However smart leaders must plan as if it will.

• My cautious notes emphasize no particular thrill about where things are at, while denoting how events (not just technicals) can ultimately impact S&P.

•  Choices going forward require attention as we've done since January's first WuFlu warning, so we'll not rest on laurels of capturing the down and up.

• Thus 'renewed vigor and determination' into Trump's Re-election' versus the 'higher taxes, rampant uncontained pandemic, leading to economic chaos or worse, and a calamitous Depression' alternative are seen by a lot of players as the stage on which bulls & bears must contest the outcome, it's opaque.

• I'm smiling as I type this, because I don't envision elation or utter despair, at least on the Playbill just ahead, but at the moment there are no playbills (as programs for Broadway shows are nowhere to be found this year, nor tickets to Cirque de Soleil shows, all of which leaves holes in our soles, if not merely getting-by day-to-day).

• In fact, I could carry this further, I think the absence of 'sports-betting' as well as willingness to visit casinos, has enhanced people playing, not investing, in stocks this year, Robinhood phenomena were an example, and a sobering one for those on Wall St. that constantly derided individual players trading.

• Seriously, while many stocks were merely rebounds from excessive lows, the stars were those that can thrive, not just survive, during the pandemic.

• Meanwhile the small-caps and mid-caps rebounded at times, but not to the magnitude of S&P and FANG, so there is a bullish alternative out there.

• That bullish alternative requires 'no worse' than a trading range at this or a slightly higher level (debatable but open-minded), while the bifurcated nature of this market persists.

• So, accept that you really need prospects of a 'cure' of this vile disease, not just dependence on China for a vaccine (but we would look at it favorably if it does well in upcoming Canadian trials, or preferably the UK, Israeli, German or American vaccines of which there are 17 in-trial stages now).

• Most important remains therapeutic drugs, not merely (as crucial as that is) in a hospital setting, but before any of that is necessary, and that would be a magic potion for this market, which could even offset political alternatives.

• Hang-in, don't expect Q3 to replicate Q2, and keep your chins up even if the S&P takes a breather next month, while a few stocks do far better.

Meanwhile . . this Chinese development (Phase 2 now) is potentially a very big deal, and it shows that market sensitivity to optimistic news exceeds that coming from pessimists. Just today the S&P looked askance as if it viewed Dr. Fauci's warning of maybe 100,000 positive COVID-19 cases daily as just another effort to hammer-home the seriousness of the ongoing spread. It ignored that entirely!  

It's not a hammering of fear mongering, because absent a viable vaccine, or even more urgently an effective drug (whether from Merck (MRK) or others working toward it now), well, then yes this 'disease incubator' risks a more dire progression, which of course would impact finances, consumption, and overall life more severely.  

I remain an optimist as far as that goes; but I'm not a national leader; hence it's a bit less angst-producing for me to be optimistic about treatments, rather than those for whom 'the buck stops', whether success is found sooner, or different tactics are needed for surviving this if it comes later.  

That's why even the Chinese vaccine (Phase 3 will be tested in Canada while it's ongoing in PLA military in China after Phase 2) reminds us how crucial 'science' is to resolving this plague on humanity. Speaking of that, while I don't know for sure, it wouldn't surprise me that China's 'only' Level 4 BioLab at Wuhan (where WuFlu, known later as COVID-19 likely started in our speculation) just happens to be where the potentially-viable vaccine candidate was also developed. There of course are other vaccines 'in-trial' now, but for some reason I suspect China will be better equipped to understand the nuances of this horrid pest. Wonder why.

China also may face another pandemic risk, from a 'swine-flu' similar to the past ones, and where about 10% of all pig farmers and workers in China already are infected. That's the bad news. The good news is the similarities may mean that a vaccine had been modified from prior 'swine-flu' vaccines, and included in annual routine vaccines, as it's not that different. That is pending, but probable. Also the 'swine flu', like others, didn't spread quite as widely because it wasn't transmitted by asymptomatic carriers. People caught it, they got sick quickly, they recovered or not. But they didn't run-around infecting everyone unknowingly. 

In-sum: the S&P finished it's best Quarter in about 20 years! We're honored that we have essentially been 'long and strong' the entire Quarter, reversing from the bearish stance we adopted in late January / early February, to enthusiastic Bulls, as of the anticipated capitulation 'max-fear' panic on March 23rd.  

Even as we defied the most recent bears, looking for upside at quarter's end as well as perhaps a couple days ahead of July 4th, providing there's not a buyer's strike late Thursday, perhaps related to concerns about civil disobedience over the actual holiday, though we don't know of course. We do know that aside, that our view has been higher, with greater risk once this fails, and limited upside for a majority of the overworked big-cap tech stocks, while risk grows.  

That risk for sure can be offset to an extent we do not have the more-concerning outcome for the spread of COVID-19, as time-if-of-the-essence for a treatment or drug that works (from Merck or others), while numerous vaccines are tested.  

Bottom-line: we anticipated another upside day and got it. Bears keep shorting and getting run-in;, and we'd love to seem them capitulate too.