This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. This is how markets behave in times of low conviction, high emotion and acute sensitivity to the prospect of further loss. Another twitchy session flitting above and below the flat line, above and below the 4,000 level on the S & P 500, oversold enough to bounce but with a very thin cushion of buffer capital from folks willing to take incremental risks. The S & P 500 has moved in a wide and whippy range since the steep head-fake rally after the Federal Reserve's decision last Wednesday . Are we oversold enough to bounce? Sure. Would it make sense to get some relief after the passage of the hotly anticipated and "not great, not terrible" consumer price index report ? Plausibly. But the pain in decimated growth/tech and crypto and the general portfolio stress across stocks and bonds says to be open to darting moves either way. Knowing the tape can bounce hard for any reason or none at all while recognizing that initial downside targets based on technical trends and valuation norms sit between 3,800-3,900 is the tricky balance a trader needs to strike. For longer-term investors, the risk/reward should be getting better, but no promises on a smooth ride. The inflation data was hotter than forecast, with evidence of core price momentum, though the data is still sort of consistent with a possible "peak inflation" premise. There was much talk of unsustainable airfare price surges forcing core services CPI higher. Bond market found nothing in the numbers to change the view of two half-percent Fed rate hikes in each June and July, maybe another thereafter. This is now the reality investors need to accept and decide if the effects are largely priced into asset markets or not. Value stocks have trounced growth the past six months, a whopping 20 percentage-point outperformance. Yet it's all been because growth has imploded with value down less. I noted starting several months ago that people calling for a value renaissance like what followed the year-2000 tech peak should be aware that was mostly about growth collapsing. Seeing this here. The interesting questions now: Can we escape the year-2000 bear-market path in which the huge-cap growth stocks also were dragged into brutal downdrafts? If we are seeing peak inflation, can megacap growth show some moxie with valuations lower and positioning lighter? On the first question, it's clear the speculative-tech mania that culminated in early 2021 is having its tech-wreck bear market: many stocks down 60% to 90%, too many flimsy IPOs, untested business models and an abundance of hype and hot money. Yet after 2000, Microsoft shares ultimately fell over 60% even as earnings kept growing, Cisco collapsed 90% from the peak and even Hewlett-Packard lost 80% over a couple years. The good news: MSFT was at least twice as expensive at the 2000 peak vs the 2021 top on a price-earnings basis. Stocks like GOOGL and FB and arguably AMD have now been de-risked through heavy valuation compression. We'll see. Market breadth has softened with the fade in the indexes but not quite a washout: 40% upside volume on NYSE and 25% on Nasdaq. Credit has turned a bit squirrelly, junk-bond yields leaking wider, no panic but no longer immune to the equity agita. VIX remains fairly unresponsive. The slow grind lower is not enough to get folks paying up for immediate protection.
Traders work on the floor of the New York Stock Exchange.
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.