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NEWS
Bears Pounce Despite Nvidia’s Beat

It was another rough day for stock market bulls, with Nvidia’s results failing to quell investor fears about artificial intelligence (AI) industry growth. There continue to be many potential downside catalysts, with market participants unclear what the next bull case will be. As a result, many feel the risk remains to the downside. 👀 

Today's issue covers a popular sentiment reading flashing red, Amazon’s quantum computing push, Coinbase’s case being dropped, and much more! 📰

Here’s the S&P 500 heatmap. 3 of 11 sectors closed green, with financials (+0.50%) leading and technology (-3.62%) lagging.

And here are the closing prices: 

STOCKS
A Sentiment Check You Need To See 👀 

The U.S. stock market indexes remain under pressure for the many reasons we’ve already discussed this week, including tariff uncertainty, inflation resurgence concerns, geopolitical tensions, and a lack of a catalyst for the tech sector.

Below is a chart of the S&P 500 ETF breaking below its uptrend line from its November 2023 lows, with momentum nearly reaching oversold territory. Traders have their eyes on a prior breakout area and 200-day moving average near 565-560 as the next major level of support. But clearly, the short-term trend has shifted lower, and the mid-term trend is sideways, giving bulls pause. ⏸️ 

From a sentiment perspective, things are much harier than expected in a market less than 5% from its all-time highs. The American Association of Individual Investors (AAII) sentiment poll showed 61% of respondents as bearish, the highest reading ever relative to the market’s drawdown level. In essence, people have never been this scared by such a small retreat in market prices. 🤯 

One theory is that the pumelling of high-growth stocks like Palantir, AppLovin, Hims, and others in the last two weeks has caused sentiment to shift sharply lower despite the major indexes holding up well. After all, these high-growth stocks are popular among retail investors, so many likely felt the pain of their pullbacks. 😬 

Nevertheless, bulls see this sentiment reading as one sign of potential market capitulation. Typically, this level of bearishness occurs near market lows following much steeper declines.

As for Stocktwits sentiment, it’s currently sitting in ‘neutral’ territory as investors and traders assess the recent pullback and identify opportunities on both sides of the tape. Regardless, the 200-day moving average remains a key technical level many are watching in the major indexes and market leaders. 📍 

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