A period of renewed decay has simply been postponed by the Oil rally; pure and simple. The asymmetric risk-reward in the high yield sector is alarming too; as it’s definitely difficult to advocate shorting at this very moment; while viewing the upside move in the S&P as running into resistance, but that’s tempered by a pending Oil meeting (March 20 they say) in Moscow. 

That may be more than nominally important, and can indeed forestall any sort of market pressure, or at least established a high-level range, keeping market bears at bay, until more shorts are flushed-out; though much of that is behind. In a sense this is a tricky spot; because you have Bloomberg late Friday with a warning about ‘counterparty’ risk resulting from a new Fed rule; and you’ve got a crucial weekend (now) in China, followed by another ECB gathering; and then the FOMC. Any of those can roil the markets even without a macro decision on forward direction. 

That makes the week ahead perhaps better for traders, with no clear indication for investors, as far as the next direction. This also is the normal seasonal time that has thwarted market declines, even when dire prospects are telegraphed, as was the case this time of year in 2008. Not to say we’ll have a Lehman-like event; but to observe that the market can horse around before going lower. 

So yes, we’re not very bullish here; just saying the short-term exhaustion, or a topping-process, can take awhile longer. We’d be delighted if it was an up-down Friday reversal, and we did finish well off the highs with many momentum stock favorites being very flat (again it was Oils and Apple lifting the Index); just tend to suspect there’s more jockeying ahead before market implosion risk returns.

Bottom-line: emerging markets are rebounding; not necessarily starting a sort of protracted move. That may be true for Europe and the U.S. too; ever since it was beholden on central bankers and others to jawbone view of stability when it seemed everything was at-risk of cratering. Too many got scared and shorted or sold ‘after the fact’ about a month ago; and that set-them up both to be run-in and in fund cases, to have to re-position. The concurrent rally in Gold suggests it isn’t so simple, and the macro concerns aren’t very well resolved.