The last couple of Mondays have seen the market hold, and even on last Monday, the decline was impressive, given a major spike in crude oil prices.

From there, each session was filled with drama, but rallied around hopeful signs, and even not-so-hopeful ones.  

Arrows Pointing in the Right Direction

Equity indices higher; fear and bond yields lower – that’s the way we like our arrows.

The last three days of last week were very encouraging. The market could have been slammed but instead climbed off the canvas. Yes, from now on, last Thursday will look like a ‘nothing burger’ in the history books, but it was big for those losing hope. The Volatility Index (VIX) and bond yields eased.

Eclectic Leadership

Making last Thursday even more impressive, two of the three growth sectors finished in the red, while the tiny Real Estate (XLRE) Sector led the parade.

Consumer Discretionary (XLY) was slammed as auto stocks spun out. I suspect there will be more pressure on consumer names, in part due to higher gasoline prices. Technology (XLK) has performed well, and continues to attract interest from value, growth, and momentum investors, as well as those seeking shelter in the storm.

Factors

Low volatility was the best factor, which underscores the level of anxiety permeating the air right now. Small-caps tend to make relatively large moves when the 10-year yield is low.

Watching Oil

Crude oil spiked and held up higher.

Backwardation

Right now, the oil market sees a near-term conclusion to the Iran Conflict. While crude oil contracts edged higher last week, they remain substantially below the current price of West Texas Intermediate (WTI). Oil isn’t freaking out, and that’s freaking out the stock market bears.

New Countdown

There will be a press conference today at 1:00 PM to bring the nation up to speed on Iran, as the clock counts down to what could be ugly devastation.

American Exceptionalism

A shoutout to all involved in the rescue of Air Force pilots over the weekend.  It was heart-pulsating. I got choked up reading the step-by-step drama.

Today’s Session

Equity futures opened lower last night and clawed into positive territory, but it's clear the market is anxious. These are the backdrops I love – the ones where we can see the heart and soul of the market.  Last week was impressive, and I would like to see resolve morph into aggressive buying.

President Trump speaks today, and the Artemis mission passes the dark side of the moon.  American Exceptionalism has come through like a shining light during the Iran Conflict.

Retail investors haven’t bought the dip – yet.

I suspect there will be a mad rush to buy once the pendulum swings a little more.

I want to see a close above the 200-day moving average for the S&P 500.

Sizzling

Optics and memory continue to sizzle, and the overall AI trade is alive and well, even as Mag Seven names struggle.

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