This is the daily notebook of Mike Santoli, CNBC’s senior markets commentator, with ideas about trends, stocks and market statistics. Subtle resilience in equities in recent days has emerged more clearly as a fuller rebound attempt. Stock indexes have put in a pattern of late-day strength overcoming early weakness, what appears a “higher low” being formed on the S & P 500 chart and an appetite for returning to wounded growth stocks. The index is still in “prove it” mode, another 6-7% rally off the lows like several before it on the way down, now comfortably above the intraday lows from six weeks ago and nosing above the 20-day average as a short-term hurdle cleared and facing a better test up around 4000, where we find the 50-day average and the level from which the market gapped down on the way to new lows almost a month ago. Wall Street seems again in one of those moments where investors feel roughly in tune with the likely Federal Reserve policy path, correct or not. The FOMC minutes Wednesday from the meeting three weeks ago was expectedly hawkish, as it had to be give the committee was justifying a 75bp hike. But no real surprises and yes much has since changed – saturating talk of recession, oil off 20% from highs, Atlanta Fed GDP Now for Q2 from flat to minus-2%, junk-bond spreads nearly a percentage point wider. Still, when one considers the main reason for those market moves has been the very fact of the Fed’s 75bp hike and promises of another one in July, it’s a bit of a hall-of-mirrors image of what is cause and what is effect, what’s timely and what is dated. True, the market wants to look ahead and through to the end of this hiking cycle in coming months, while the Fed needs to see the actual inflation numbers cooperate. Yet it’s possible markets have repriced enough to allow for all of this for now. If making a pro/con list for the market, sentiment is definitely a pro – though this is more context than catalyst, the precondition for a recovery rally than a timely promote for one. One-year average bullish AAII readings now near record lows. Of course this can stay here a while, as in ’08 and ’16. And there is a broader downtrend in this bullish feeling, so maybe it should be lower before it’s done. But this is something like what slow-motion capitulation/buyer’s fatigue looks like. Equity valuations started from a very high point but the degree of compression has roughly approximated what it takes to price in a profit slowdown/slippage. Like so many factors, this one looks like it’s gone far enough unless this is wo be a multi-year recession-haunted bear phase as in the early 2000s and 2008-09. Credit markets have been a significant pressure point, very much part of the “recession risk is high” story, but also tale of low-liquidity and hostile Fed. The slightest bit of improvement in high-yield spreads in recent days after they touched 600bp. Stocks seem all right with 2- and 10-year yields migrating back up to 3%, still well below lows, as it came with moderately reassuring ISM Services data yesterday and some relief on gas prices and mortgage rates. Friday’s jobs number will be a good Rorschach test, investors wanting a decent but not very hot number to get the Fed more aggressive. Market breadth strong, showing decent accumulation, even on quiet summertime volumes. VIX back in the mid-20s, low end of the 10-week range. Not exactly relaxed but a bastion of cool stability relative to bond and currency volatility.