A Friday Redemption Arc, Or Just a Pit Stop?

Your text yesterday: "God I hope tomorrow is better."

My text back: "It will be."

What actually happened: It was. Sort of.

On Friday, the market did the thing where it goes up a lot after going down a lot, and everyone in the chat rooms and Bloomberg terminals and Discord servers collectively exhaled. The Dow rocketed 2.47% to 50,115.67—its best day since May, and the first time the blue-chip index cracked five figures. The S&P 500 climbed 1.97% to 6,932.30, clawing back into positive territory for 2026. The Nasdaq jumped 2.18%. Bitcoin bounced back following a 50% tumble from its peak.

But here's the thing about redemption arcs: they only count if nobody goes back to their old life.

For three days straight, we'd watched the machinery of deleveraging work in high-definition. Bitcoin broke below $61,000. Institutional demand reversed materially, with U.S. bitcoin ETFs becoming net sellers in 2026 after purchasing 46,000 bitcoin last year at this time. Bitcoin had broken below its 365-day moving average for the first time since March 2022—worse than the early 2022 bear phase over the same timeframe. $2 billion in long and short crypto positions liquidated in a single week. The crypto fear and greed index hit 11, the lowest since November 22nd. Capitulation doesn't announce itself. It just smells like fear and forced selling.

The question wasn't whether markets would bounce. Bounces are free. The market bounces every time someone realizes they sold too much. The real question was whether anything had actually changed underneath.

Let's look at what bounced and what didn't.

Monolithic Power Systems posted 21% year-over-year revenue growth to $751 million led by data center and cloud demand, and raised its dividend. Oppenheimer rated it outperform with a $1,300 target. Roku got upgraded by Oppenheimer to outperform on catalysts including an Amazon DSP partnership and the Winter Olympics, with a $105 target suggesting 22% upside. These aren't broad market thesis plays. These are the kinds of individual stock calls that say "we're picking winners now, not catching falling knives."

Meanwhile, the actual reflection of how people feel: The University of Michigan Survey of Consumers jumped to 57.3, beating the 55.0 consensus. But sentiment surged for consumers with stock portfolios, while it stagnated and remained at dismal levels for consumers without stock holdings.

Let me translate: Rich people feel better because their stocks went up. Poor people still feel terrible because inflation is still above 3% and their wages aren't moving. The labor market situation—initial jobless claims rising more than expected, job openings falling to their lowest since September 2020—didn't improve on Friday. The Fed still hasn't cut. Kevin Warsh still hasn't been confirmed. The AI capex story is still asking whether returns will ever justify the $500 billion-plus that's getting shoveled into data centers and chips.

What changed on Friday? Technicals. Positioning. The fact that after you liquidate enough weak hands, there's nothing left to sell except the actually good companies—and those are buying. Goldman Sachs reported that more than half of earnings released have beaten analyst expectations, above the historical 40% average. Some business fundamentals are legitimately solid. So Friday happened.

But the narrative tension is still unresolved. We had a terrible week, a okay Friday, and a market that is essentially flat for 2026 despite a Dow that kissed 50,000. That's not recovery. That's oscillation.

Here's what I noticed: Monolithic Power Systems was at new highs. Palantir is valued like it's going to own the enterprise AI market. Coinbase and Marathon Digital sank during the crypto rout and are still underwater. The message was surgical. If you're the best-in-class operator in a growing category—defense tech, AI infrastructure, semiconductor power management—you get bid up through the volatility. If you're a proxy play or a leverage play or a retailer getting bent out of shape by the Fed's refusal to cut, you get left behind.

The Friday bounce felt good because we needed it to. But bounces are how you know you're still in a washout, not a recovery. Recoveries feel boring. Bounces feel like winning. That's how you tell the difference.

By Monday morning, we'll know if Friday was the beginning of something or just the inevitable exhale before another leg down. The crypto market will probably tell us first. All top 10 coins had recorded price falls, with Bitcoin at $70,884 and the fear and greed index at 11. If Bitcoin stabilizes around $70,000 and holds through the next Fed signal, then the deleveraging is done and it's time to find a new equilibrium. If it rolls over again, then Friday was just the market being nice to us before getting real.

I'm betting on another wobble. Not because I want one. But because every chart in February 2026 has the same shape: up, down, sideways, repeat. That's not a trend. That's a market looking for a reason to care, and not finding it.

The relief rally is fine. Just don't mistake it for a solution.