Whether trade walls suddenly fall or some other relief occurs between now and Midterms, is a certain 'known-unknown'. However Larry Kudlow's Friday morning appearance on CNBC did not produce the kind of rebound seen on his last references to 'trade', although the down-bounce-falter of that first hour is just what I called for in a pre-opening intraday note.  

Later, as the President outlined a proposed further increase in tariffs on Chinese made goods (this time including many of Apple's products; hence bearing the shares a bit more just days before their next product rollout), stocks of course came under renewed pressure. We got a forecast down-up-down session; but the point is that many stocks have been setting-up for decline for weeks if not months; as consistently observed.  

I also agreed with reasonably favorable interpretations of the Jobs Report; at the same time none of it was really earthshaking. Average Hourly Wage earnings were solid; and that's more ammunition for the Fed to hike and I'd not be consoled by the idea of needing 2 or 3 more to impact markets. 

Daily action has actually rolled around throughout an excessively longer than usual trip of mine (with recovery from a 'ship flu' bug complete); oddly finding the S&P tense throughout, but little resolved or changed trend-wise as the leading (capitalization-based) Senior Index stays in a high range. At the same time, whether Financials; cryptocurrencies; or EM stocks; most did not reward investors; and even eroded while the S&P range persisted.   

That range is troubling; because 'even if' the US finally executes new trade deals that the markets like, those Indexes were at such extreme levels that one might get a sharp rally that nevertheless gets sold into.  

As assessed before traveling to Europe; the high-priced momentum stocks (including FANG..Facebook, Apple, Netflix & Google) or other extended stocks, were at risk of blowing-off, already correcting, or too high-priced to interest any buyer not compelled to chase the upside. (Tesla is one stock I also warned of for many months as on borrowed time, due to competitors driving forward. I admired Musk; while recognizing challenges faced.)  

Looking back at our bullishness 'if Trump won' in November of 2016, we of course saw no reason for normal investors to have chased recently. That's been a different story for institutions, or at least those with little choice but to be in the market fully at all times. My view was essentially sell part of all holdings in such stocks (especially Facebook and Google more so than of course Apple, although it too deserved some lightening-up). I recalled the old saying of mine (not meant to determine a percentage which really has to be considered by each shareholder): 'sell half and hope you're wrong'.  

As a for-instance; look at the time I was away. The FANG or 'momentum' stocks had difficult with their leadership role, and as I forewarned, showed no reason why anyone would chase those prices higher. Hence I referred to the buyers (typically above current levels) as 'Greater Fool Theory' type of players. That most such stocks stayed suppressed 'while' the Dow held up or advanced, typifies what I've often discussed during my travels; that's the effort to rotate from overpriced into others; but without enough 'oomph' to meaningfully revive the FANG and similar stocks.  

This matters to everyone, because over 90% of price appreciation (not just volume) more-or-less is accounted for by that handful of stocks. To wit: just a small universe of stocks has been controlling the market's advance. So a pulling of (say as an example) 2 legs of a 3 legged stool; makes it pretty hard for the stool to remain standing. 

Repeated omens (including technical 'Hindenburg Omens' that occurred several times) suggest this market is what I've described: an accident that is waiting to happen; but with so many aware of the extended nature now; they short and briefly get run-in. Hence the 'Rinse & Repeat' mantra I've used through the Summer to describe extended level S&P behavior.

By the way to our younger investors who might not know; 'A Hindenburg Omen' is a technical indicator that compares the number of 52-week highs and lows to predict the likelihood of a market crash. Obviously derived its name from the German Airship that 'crashed and burned' in New Jersey. It is my view that we don't have to totally descend to Earth like some serious curmudgeons or permabears keep saying; but orbit for a bit and correct.  

It has been my view since suggesting 'to the Moon' if Trump won; but not to interstellar space. That basically means we got to the Moon; we are in a series of 'orbits'; possibly get a more serious corrective move; but may not end the long cycle if some fundamentals fall-in-line. And that's the rub as a buyer of expensive stock 'now' is doing so on-faith not information; since it is so important for growth that we get through the Midterms absent general disappointment, and that major trade deals are successfully concluded.  

Achieve that, and the market will still react (monetary policy comes to mind of course); but the correction doesn't have to be draconian in nature. As is always the case; there's the 'other side of the coin', which would be failiure of getting trade deals and so on. But for those who have been 'in' since the Election in 2016; there's little reason to jockey with those chasing here.  

The new week begins with the continued heaviness we've seen; however it is a full trading week so they have the opportunity to reverse any initial weakness. Nevertheless I'd not be lulled into complacency, suspecting it's essential to remain nimble and suspicious of any rally's sustainability.