This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. The market isn't nearly as weak as it looks today, with the Nasdaq 100 and semis off nearly 2%, energy down about 3% and everything else holding up OK. Too early to say that the salutary rotational forces again prevail as they did all of 2021, but it makes this a less internally damaging 1%-plus drop for the S & P 500 . The equal-weight S & P off half a percent, the beleaguered banks finally bouncing, small caps flattish, consumer cyclicals finding some relief after a lousy stretch. We'll see if this internal steadiness can last the day. Of course, whatever the drivers, those who trade the indexes themselves – and there are many – will find the S & P 500 looking a bit precarious again. That is, it's not far above what might represent a new breakdown level that would make the chart look less like a convincing bottom than a feckless downwardly biased trading range. The push higher in longer-term Treasury yields has been relentless: 2.75% on the 10-year the latest stop. This places it above that super-long-term downtrend line (which was also breached, briefly, back in 2018, so this isn't a sign of "up and away"). The Daily Sentiment Index for Treasurys is down to 8% bulls, super-low, so a fade of this move has some merit but that means fighting some serious momentum. To an extent the overall market is caught between fear of persistent high inflation data and the Federal Reserve's aggression toward it on the one hand, and the threat to economic growth from rates/Fed on the other. Ultimately though, the latter (growth fears) would counter the former (by bringing safety buyers into bonds). We could also see some softer trend in core CPI on Tuesday, so aggressively shorting bonds here seems treacherous. Nasdaq's downside leadership remains a key story, the "old reliables" of FAANMG remain a "source of funds." The main project of the market this year has been compressing stretched valuations, booking massive profits built up over two years and chasing money out of crowded positions, both of which are drags on Nasdaq 100 stocks more than others. Now though? Hard to say. The group has given up most, not all, of its pandemic outperformance. According to Morgan Stanley, hedge fund tech positioning is near the lowest on record. Nasdaq 100 relative to equal-weight S & P 500: Earnings season should offer the usual to-and-fro of company-specific moves that make for tricky trading, but it also tends to make for a less macro backdrop with lower correlations among stocks and sectors. This can restrain index-level volatility. It always takes a while for any real themes to develop in earnings. The setup is stable forecasts but outside of energy very modest downscaling of expectations. Market breadth Monday is moderately weak, 2:1 down:up volume. VIX has a bid, still in that little uptrend, not at anything like stressed levels yet given the indexes back at three-week lows. Some of the protection bid is undoubtedly prep for the consumer price index data Tuesday.
A Trader on the floor of the NYSE
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This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.