This is the daily notebook of Mike Santoli, CNBC’s senior markets commentator, with ideas about trends, stocks and market statistics. A light test of last week’s rally found only modest profit-taking so far, as the S & P 500 edges closer to the borderline between “just another relief bounce” and a possibly sustainable rebound. The S & P 500 is running up toward its 20-day average, a common target of bear-market bounces, sometimes with an overshoot. The real fulcrum could be above there, where the 50-day average sits at 4,065 and then 4,100 level where the latest breakdown to new lows occurred. The market continues to benefit from the deeply oversold state of the tape just over a week ago, cut-to-the-bone equity exposure among fast-money professionals and dour sentiment. Pervasive recession fears and quarter-end tailwinds noted here over the past 10 days from rebalancing into equities from bonds. While much of that reallocation might have occurred, and the market itself still has plenty to prove, it pays to be open-minded about what’s to come given the history of important market turning points into quarter-end and after big options expirations (the December 2018 and March 2020 lows, for example). The macro picture is still cloudy, and there’s no escaping the fundamental reality that the Federal Reserve continues to tighten into a slowdown. But the nuances of how much is priced in, whether inflationary forces are waning and if the market is now looking ahead to a culmination of rate hikes within several months makes it trickier than simply to repeat, “Don’t fight the Fed.” Durable goods was better than forecast today in overall terms, though in real terms shows softness — a good glimpse of how nominal dollars in a higher-inflation economy mean real revenue even when momentum is flagging in terms of unit demand. Pending home sales also an upbeat surprise, so coincident data looks OK if not great. Bond yields are up a small amount on the durables data, but still off the recent inflation-panic highs. Real yields are still solidly positive and arguably restraining equity valuations. Last week’s jump in stocks in part on slight moderation in University of Michigan sentiment poll inflation expectations is both silly and understandable. Fed Chair Jerome Powell himself cited the UMich inflation data as cover for his flash 0.75 percentage point rate hike gambit, so this is the world we’re in — a survey item that moves almost exclusively with gasoline prices driving the central bank’s narrative even as the Fed Chair last week conceded that policymakers can’t do much to sway gas prices. The widespread expectation of a late-cycle slowdown with rising recession risk has underwritten a tentative revival of growth stocks vs. value. Russell 1000 Growth relative performance to value just bounced off the level from the very start of the Covid lockdown (the mid-March 2020 NBA season cancellation right before the final stock-market plunge). Of course, growth had already been on a good run up to that point, so this isn’t the same as saying the former leaders are washed out and ready to carry the market again. Energy is bouncing nicely, having become short-term oversold after running to an extreme overbought perch. The nasty correction was enough to cause late-coming bulls to question the trade but hasn’t yet compromised a longer-term uptrend. A good reminder, though, that energy would absolutely not likely remain immune to any recession that ensues from the Fed trying to dampen demand through the economy. The rest of the commodity complex has decidedly rolled over. Market breadth is middling, just barely better than 50-50. Even with Friday’s sharp jump haven’t seen headlong real-money buying yet that would speak to FOMO kicking back in. VIX hanging near 27, still above the low-20s range where it has reached as previous temporary relief rallies ran out of steam.