This indicator is offering a hopeful signal for global markets, despite turmoil in China

This is the daily notebook of Mike Santoli, CNBC’s senior markets commentator, with ideas about trends, stocks and market statistics. Stocks are listlessly slipping back as part of a prolonged pause that has now contained the indexes in a narrow range for more than two weeks just under a widely watched resistance area. Definite overtones of “global growth scare” started things, though they have moderated. Oil is firmer and the 10-year Treasury yield is up since the overnight session. S & P 500 has closed in a 2% span around the 4,000 level since Nov. 11, topping out just below the slowly declining 200-day average and the downtrend line that dates to the first trading day of 2022. The index is still holding the shorter-term rally band for now. Rising Covid cases in China and protests are shadowing economic sentiment but are otherwise hard to fit into the broader outlook. Reopening expectations are not exactly high, based on market-implied pricing and the policy response is tough to handicap. But it’s fair to say it feels initially like a drag on growth and supply-chain recovery. Crude oil is trading sloppily around the year-to-date low even with its intraday lift. It’s helping inflation sentiment and suppressing bond yields, while also raising the question of whether it’s sending an uncomfortable message about recession probabilities. Fair to say it’s still a “good for the U.S. consumer” story however it plays globally. The action is finally pressuring energy stocks, which have wildly diverged from crude to the upside in recent months. Even down 2% Monday, they are only 5% off their high. Are too many people hiding here or is this just a sign of healthy earnings to come even at current commodity prices? Global equity-market breadth has improved, with this Ned Davis Research chart of the percentage of MSCI All Country World Index components nudging into uptrends offering a more hopeful signal. Not yet definitive, but it suggests if nothing else that the typical stock on the globe has been finding some fresh demand in recent weeks. Toting up the weight of the evidence on the market: Seasonal factors remain positive but much of a “typical” fourth-quarter rally off an October low is probably in the books. Sentiment is cautious, though less fearful versus six weeks ago, and it’s still supportive but no catalyst on its own. Earnings are slipping but not cratering. Technically, it’s still a downtrend, but it’s certainly plausible a bottoming process is underway. Credit has remained OK, and it’s not flashing bright alarms. The Federal Reserve’s likely path seems well-priced at this point as the prevailing worry pivots from rate hikes to lagged effect on the economy. Market breadth is soft, not a washout. VIX perking up from the 20 area, rebuilding some alertness after a quasi-holiday weekend and ahead of some known catalysts (Powell speech, PCE inflation data; monthly jobs report) in coming days.