This is a daily notebook by Mike Santoli, CNBC’s senior market commentator, with ideas for trends, stocks, and market statistics. Markets are in a listless state near the end of the trading range as Wall Street awaits some jobs numbers and tries to determine if this rally is different from previous fleeting rallies. that of the bear market of 2022 or not. The S&P 500 is hovering just below its early-June high of 4,177 or so, followed by half a point of its entire peak-to-trough decline near 4,230. So there are some bullish tests, just as parts of the market are starting to look a bit overbought in the short term. Much talk from sell-side trading desks that the S&P 500’s 14% gain was primarily a positioning shock – a net-heavy short-term hedge fund community, extreme bearish sentiment, and high levels of volatility. high cash at the mid-June low created a strong bounce. Right, sure. This is how all recovery rallies will play out – tough rallies and enduring rallies are the same. However, this does not mean that the demonstration is purely about mechanical/flow factors. Since the S&P low in mid-June, crude oil prices are down 20%, gasoline prices are down every day, and 10-year Treasury yields are down more than half a percentage point. Meanwhile, the macro data has leaned slightly towards a “gentle” landing rather than a “quick slide into a recession”. Recall that the relentless rise in gas prices and the Federal Reserve’s maintenance of its policy plans aimed at fueling inflation and consumer expectations – which have been instrumental in supporting gas prices – was the main driver of the market’s plunge to mid-June lows. Several reversals in gasoline prices and yields lent the idea of ”peak Fed hawks,” with some justification. The Leuthold Group’s Jim Paulsen notes that the risk-seeking ethos of the current rally, a basket of “offensive” sectors and strategies involving “defensive” games makes the run look like previous slopes of key market lows. Notably, perhaps the opposite extremes of last year’s defensive over-attack were significantly more difficult than previous highs, but it’s still something that makes this rally. slightly different from before. The weekly unemployment rate sees another rise and the four-week average is trending higher, consistent with increased recession risks but not yet in absolutes indicating a severe weakening of the economy. labor market. Friday jobs are still expected to look good. It is unclear whether the market wants a very strong print, as the Feds continue to use underlying economic strength as a cover story for their determination to achieve higher rates and does not consider rolling back easing in the coming months. Yes, the Fed speakers make it look like the markets are ignoring their insistence that there is no dovish pivot in sight, but we are close enough to neutral and far enough out of the way. Fed’s next meeting and S&P 500 just back to two-month highs. For me, it’s not if investors don’t pay attention to growth. But no one is talking about short-term interest rates between 4% and 6% anymore and leading indicators of inflation are buoyant, so some easing in the stock market makes sense. Tactical active managers in the National Association of Active Investment Managers’ survey lifted their equity allocation from extremely low levels, which is quite consistent with market action and put this exposure indicator around the low of neutral. Market breadth is quite even. The VIX is up by a small amount around 22. Maybe the jobs report will keep it flat from here, but after Friday’s early print and market open, it could hit an airbag .