(These are the market notes on today’s action by Mike Santoli, CNBC’s Senior Markets Commentator. See today’s video update from Mike above.) The market continues to bait and trap aggressive bears, with the two-day purge of speculative and high-momentum stocks either pausing or finished, allowing upbeat earnings and a tireless dip-buying bid to carry the S & P 500 back to the very top of its two-week range and a hair below a record high. Traders went right back to the high-beta stocks that drove the overshoot into the recent record highs, the SPHB ETF up twice as much as the S & P 500 both Thursday and week-to-date. Viewed at a distance, the tape has been undergoing some moderate high-altitude turbulence, a sometimes-sloppy rotation. It amounts to seasonal consolidation as overbought conditions and overheated low-quality stocks collide with benign Treasury yields , an upward earnings trajectory and positive year-end tailwinds that usually arrive by November. With a maximum pullback from intraday high to low of not-quite-3% in the S & P, it hardly represents a thorough reset of prices, expectations or positioning. In a bull market, not all excesses get wrung out before the next ones build up. That’s what all-in investors better hope, given that the most aggressive precincts of this market haven’t retraced much of their parabolic ascents at all, yet. Here are JP Morgan’s gauges of “froth sentiment” and crowding into less-profitable companies — data as of late Wednesday, before Thursday’s minor bounce in these groups. Some chatter about how Thursday’s date is the single best moment on the calendar in terms of forward three-month returns in the S & P 500. Intuitive and encouraging, in general. Though note that the single most inopportune date to buy, based on history, was in late July – almost three months ago, and the market is up 5% since then. Seasonal factors are climate, not weather. Though of course stocks tilt asymmetrically higher over time so favorable seasonal patterns face better odds of playing out. We’re still not free of an apparent sell-the-news impulse along the earnings front, particularly in stocks of growth companies that are already outperforming. But on balance, the push-pull of earnings reactions are netting out as a supportive force for the indexes, allowing the market to grow into elevated valuations, for now. It’s hard to see the market throwing much of a tantrum due to Friday’s delayed September CPI report , though at a time when bond investors are fairly cozy in their view of multiple rate cuts ahead, perhaps a hot print could serve as an excuse for a gut check. The 10-year Treasury has been dozing near the 4% level, even with Thursday’s sanctions-driven 5% pop in crude-oil prices . Market breadth and volumes are healthy though not extraordinarily so. The VIX is bleeding down toward 17, with CPI likely holding it a bit higher than it otherwise would be. Mostly it seems traders are allowing stocks to relax higher ahead of Big Tech earnings and a Fed meeting next week.
