🐻Has the Market Gotten Too Bearish?🐻

Good morning. We’ve warned for weeks that stocks are at elevated levels, and that a modest... It’s the monthly jobs numbers today and they’re not going to be pretty and will be possibly the tip of the iceberg as we head into May. [Trading Tips] Good morning. We’ve warned for weeks that stocks are at elevated levels, and that a modest pullback would be likely. Now, however, investor sentiment has gotten heavily bearish, for more than just a small pullback. That’s somewhat concerning, as fears of a market pullback could lead to enough profit-taking and cash-raising that it becomes a self-fulfilling prophecy. However, a market so quick to get so bearish could also be a sign that there’s still a major rally ahead. Bull markets don’t die when investors get fearful. Rather, it’s when investors get so bullish that they go all-in at record highs. Overall, this latest investor sentiment survey is a roundabout way o suggesting short-term caution, but that markets are likely to trend higher in the coming months. Look for a few short opportunities now, and some buy-side opportunities in the weeks ahead. Now here's the rest of the news: Sponsored Content [The 32-Second Options Trading "Training Video" Retirees Can't Get Enough Of]( Options expert Jeff Clark is on a mission to show every American at or near retirement how easy it is to trade options. [Watch his 32-second options trading "training video" here.]( MARKETS DOW 34,577.57 -0.84% S&P 4,443.07 -0.57% NASDAQ 15,037.76 -0.45% *As of market close • Stocks dropped on Tuesday, wiping out morning gains. • Oil declined 0.1 percent, closing at $70.38 per barrel. • Gold closed up 0.7 percent, last going for $1,807 per ounce. • Cryptocurrencies trended higher, with Bitcoin at $46,617 at the stock market close. Today’s TOP TIPS [Don’t Sweat Slowing Earnings Growth in Great Companies]( Earnings season has been solid the past few quarters for most stocks. Companies have been reporting numbers that crush pandemic levels from over the past year. Now, however, companies are getting past the worst of the pandemic, and growth has been slowing from the artificial boost from reopening (or providing a useful service during the pandemic. That’s creating some modest selloffs, but also some modest buying opportunities. » [FULL STORY]( [Insider Trading Report: SelectQuote (SLQT)]( Thomas Grant, a director at SelectQuote (SLQT), recently bought 144,533 shares. The buy increased his stake by nearly 6 percent, and came to a total price of just under $1.8 million. Grant was joined by another director who bought 10,000 shares on the same day, at a cost of just over $133,000. And the day before, another director bought 1,000 shares. Overall, company insiders have been active and massive buyers since August. » [FULL STORY]( [Unusual Options Activity: Wells Fargo (WFC)]( Shares of megabank Wells Fargo (WFC) have traded mixed over the past month, as the company largely missed on earnings. Over the past year, shares have been trending up. However, one trader sees a possibility for a big drop in shares at some point before next spring. That’s based on the April $32.50 puts. Over 16,015 contracts traded, a 96.5-fold rise in volume compared to the prior open interest of 166 contracts. The buyer paid $0.84 for the contract. » [FULL STORY]( IN OTHER NEWS • [Inflation Rates Finally Cool]( The consumer price index rose at 0.3 percent in July. That’s down from 0.5 percent in June, and lower than the 0.4 percent estimate made by economists. The year-over-year pace slowed to 5.3 percent from 5.4 percent. It may take a few months of more declines to know if this is a turning point in the inflation story. • [Americans Sees Income Drop in 2020]( Median household income in the United States dropped 2.9 percent in 2020, according to the Census Bureau. Given the extent of pandemic lockdowns and unemployment woes, the overall number is modest. With the job market improving and wages rising to offset inflationary pressures, median income will likely rise at an above-average rate in the next year. • [US Housing Shortage Hits 5 million Units]( In the wake of the housing crisis, only 7 million new single-family homes were built between 2012 and 2021. Yet 12.3 million households were formed. That suggests a 5 million home gap, which will take years to close, in part due to current supply chain disruptions keeping construction slow. That will likely keep home prices rising at an above-average rate for some time to come. • [Senator Warren Proposes Breaking Up Wells Fargo]( Senator Elizabeth Warren is calling on the Federal Reserve to break up Wells Fargo (WFC), on the grounds that the bank’s prior years of scandals make it somehow unfit to continue. Warren suggests breaking up the bank’s traditional activities from its non-banking activities. Shares traded flat on the day, but some traders are placing bearish bets on the bank in the options market. • [1047 Games Raises $100 Million]( Video gaming startup 1047 Games has raised $100 million following the success of its first title, Splitgate. Years in production and consumer feedback have led to major success for the multiplayer online shooter game, which saw more than 10 million downloads in July. Overall, the company has raised $116 million at a undisclosed valuation to develop more games. S&P 500 MOVERS TOP ZBH 4.759% STE 2.731% TFX 2.632% PRGO 2.402% WST 2.227% BOTTOM WYNN 10.852% LVS 9.746% CMCSA 7.304% DISH 5.106% EMN 4.557% Quote of the Day While we take the reasons for a pullback seriously, we also see economic recession risks as low, reducing the likelihood of a full growth scare, and intend to treat it as a buying opportunity. - RBC, in a note to clients, echoing our warnings that the stock market may soon face a modest pullback, but that the overall economy is likely to continue growing, even if at a slow rate. Sponsored Content [The 32-Second Options Trading "Training Video" Retirees Can't Get Enough Of]( Options expert Jeff Clark is on a mission to show every American at or near retirement how easy it is to trade options. [Watch his 32-second options trading "training video" here.]( Not sure the best way to get started? 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