Rationalizations dominate as a series of negative estimates collide with 'facts', as well as the anticipated post-Quarterly-Expiration rebound, which basically is what Tuesday's strong reflex rebound was mostly about.

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Mostly the optimists bemoan the absence of what they call a 'whoosh day' of washout, while some will contend the preceding heavy declining mega-cap or previously sacrosanct stocks getting hit, sufficiently fulfilled that qualification.

The Quarterly Expiration was very significant, and the Quarter's-end jockeying (re-balancing) will also help define the market's structural stance ahead of Q3. Inflationary pressures will remain elevated, even if moderated in a few sectors but not broadly. To see that in presence of only nominal changes in Oil prices, is generally not very relevant (grabbing at straws to see that as supportive of a stronger stock market, which was going to occur anyway).

There's not a lot of sense with the ideas of 'making peace' with inflation, while for sure the causal factors are being pointed everywhere, depending on who's trying to assess the energy picture. Russia is making more money from Oil at this point, the Ruble recovered, the war is indecisive which is dangerous (as it points toward longer duration that's a major global problem... for famine).

Slowing economic growth and persisting inflation is 'stagflation'.. our year-long call. The duration argument on Bonds is not our focus, however some will be holding Treasuries (particularly something like the 2 year Notes) avoiding too much exposure in equities, although here and there you can stock-pick lightly in the midst of the carnage (we did a little last week, albeit not excessively).

In-sum: 

Discretion should be maintained, but as noted amidst volatility, you can have rebound S&P overall even until early-mid July, without resolution in a macro sense. At the same time Volatility didn't accelerate and we didn't hit the 40 level (I thought we wouldn't), because some stabilization appeared.

Of course the market always wants more clarity and that will be visible mostly in retrospect down-the-road. Opinions of analysts (some of whom suddenly it seems are a bit less bearish) ebbs-and-flows, and really Oil prices and the US Dollar, along with 'how goes the war', means more. Fed Chairman Powell's testimony matters also, and avoiding new riots in DC might fit the mold too.

Asset-allocation tides 'do' shift a bit as we get to re-balancing in late June, but again that's not mostly what this rebound was about, as it was simply a proper reflex after a heavy Quadruple-Witching preceding week.

Bottom-line: 

We got our post-Expiration rebound, and I suspect S&P will try for a bit more upside, although it needs some support so as to not turn back South soon. In that regards, it might depend on Fed Chairman Powell's upcoming remarks, and a constructive statement from the White House on facilitating not antagonizing a response from American's oil producers.

Short-term it still might be Apple, pleasing markets or sobering matters, that's key (still) to S&P direction. If Apple wants to be the Machiavelli of this market, Tim Cook would find this a good time to pull a magical new rabbit out of a hat. Otherwise the rally might evolve into early-mid July, but then as earnings and a paucity of favorable guidance hints surface, you likely hit new rough spots. I suspect that the market will be on-tenterhooks approaching late July's earning report from Apple (AAPL), if it hasn't been shaken before then on other interlopers.

To that end, general caution about companies heavily-dependent on factories in China might be reflected in Quarterly earnings shortfalls next month, or via early warnings of possible earnings misses. Those would trigger shakeouts or impact the Index depending which companies.