| Sosnick doesn't think so, breaking down a familiar buzzword word that's been bandied about recently: capitulation. Instead of framing capitulation in price action terms, Sosnick has one simple measure to identify these market clearing events — when people stop asking him about stocks. "We haven't given up all hope," says Sosnick, noting that people are still asking him when's the best time to buy. "The real capitulation happens when people say, 'Oh God. I don't even — don't talk to me about this anymore,'" he says. And we've now seen a few days in which some investors might have more positive things to say about the market. On Wednesday, beaten down names like Peloton (PTON), Coinbase (COIN), and Dave (DAVE) among many others were among the market leaders. Dave and Peloton, however, are both down 90% from their all-time highs, and Coinbase is down 80%. Cold comfort for many of these companies' longer-term shareholders. And this type of rally isn't exactly the most constructive setup. The stocks with the worst technicals tend to have high short interest and often lead these so-called "junk-off-the-bottom" — or J.O.B. — rallies. Every new bull market starts off from bear market lows with something that looks like what we're seeing now. But in a durable rebound, we'd expect to see new, quality names emerge and take the reins. Remember, in 2009 it was broken bank stocks like Citi (C) that led the charge higher. Thirteen years (and trillions in QE) later, Citi is still down an astounding 90% from its record highs. A stock that is down 90% needs a 900% rally to break even. Many of this year's biggest losers will likely never even approach their 2021 records again. But there are some quality names and sectors among this year's battered and bruised stocks that started showing signs of life a couple months ago — forming constructive bases as the majors hit new lows in June. Software stocks and some disruption names started picking up in May, and it appears Chinese stocks bottomed in March. Mark Newton, CMT, managing director and head of technical strategy at Fundstrat, said that investors who are focusing on the Fed's next move instead of what's happening inside the market might also be missing the boat. "Many investors continue to pay greater attention to the fears of recession and the FOMC's plans to hike 75bps vs. 100bps, and largely are ignoring a very large rally happening in Technology along with the recent drop in inflation expectations, both of which seem important," Newton said in a note to clients. Newton expects the S&P 500 to gain another 100 points through the end of this month. And in Newton's view, the widely-expected re-test of this year's 3,636 low on the S&P 500 may no longer be in play. But skeptics still abound in markets, with Bank of America Global Research saying in a note on Wednesday that the "burden of proof is on the bulls to extend the summer rally." Sosnick, for his part, isn't quite bearish in the short-term. Sentiment is poor, and positioning is low, opening up the possibility of a tactical long bet on stocks for many traders. But, as always, caveat emptor — "Bear market rallies can be short," Sosnick said. "I call them short, sharp, and ferocious." And, it seems, socially acceptable. | 
