Morning Note: Advisor Bearishness Reaching a Bullish Level (but don't hold your breath right here)

This is meaningful in the sense that when the market bottoms, it'll likely coincide with the likes of the following investment advisor sentiment reading (as of yesterday):

"The bull-bear spread expanded to -19.1%, from a -16.4% difference a week ago. That is the fourth consecutive negative spread, and the largest since 2009. Similar readings (peaking at -17.6% in Jun) were shown early last summer, when 11 straight weeks of negative difference ended early Jul. The Mar-2020 lows had a -11.6% negative spread. Large negative differences signal diminished risk and allow for accumulation. "

Of course this in no way means we're there yet... Call it simply a box (a bottoming [conditions] box) to check at this point... And could easily be nothing more than a precursor to the next (unsustainable, by definition) bear market bounce (like in June)... The latter is your most-likely scenario at this point.

This morning's producer price reading came in above expectations, and stocks immediately relinquished nearly all of a pretty nice pre-market rally... As I type, equity futures are struggling near the flatline.

I'll have more to share shortly in your mid-week market snapshot.


Asian equities struggled yet again overnight, with 11 of the 16 markets we track closing lower.

Same for Europe so far this morning, with all but 5 of the bourses we follow trading down as I type.

US stocks are mixed to start the session: Dow up 86 points (0.29%), SP500 up 0.22%, SP500 Equal Weight down 0.10%, Nasdaq 100 up 0.49%, Nasdaq Comp up 0.31%, Russell 2000 down 0.63%.

The VIX sits at 34.05, up 1.25%.

Oil futures are down 1.45%, gold's up 0.39%, silver's up 0.03%, copper futures are down 1.14% and the ag complex (DBA) is down 0.47%.

The 10-year treasury is down (yield up) and the dollar is up 0.12%

Among our 35 core positions (excluding options hedges, cash and short-term bond ETF), 15 -- led by Dutch Bros, Nokia, staples stocks, healthcare stocks and Mexican equities -- are in the green so far this morning. The losers are being led lower by Albemarle, uranium miners, MP Materials, oil services stocks and base metals miners.

Keep the following in mind as this equity bear market continues to play out:

"Embedded in the swings in one direction are the ingredients that lead to the swings in the opposite direction." 

--Dalio, Ray. Principles for Dealing with the Changing World Order

Have a great day!
Marty