This is a daily notebook by Mike Santoli, CNBC’s senior market commentator, with ideas for trends, stocks, and market statistics. Stocks rallied again at the top of the range as overall asset markets stepped back from a “recession looming” scenario, with reports that natural gas will continue to flow into Europe. Europe. S&P 500 moves above 3,900. Credit spreads are tighter. The dollar fell for the third day in a row, and Treasury yields rose and were slightly less inverted than 2- to 10-year maturities. The net effect is a test of the downtrend line for the S&P, above yesterday’s high, with many seeing 3,915 as an initial barrier to a more credible upside: Spread High corporate profits hit 600 basis points (six percentage points above Treasury parity yields) and reversed lower, now nearing year-end “recession / Fed over-tightening” 2018. Definitely not an endorsement of the outlook or tremendous support for higher equity valuations, but a healthy retracement of the recent expansion. Against this backdrop, the results of the Bank of America’s monthly survey of global fund managers are turning heavily today, suggesting that economic sentiment is at a pessimistic level even as the amount of equity capital increases. ownership / capital flow is a little short to surrender completely. The professional investment community entering the quarter has undeniably cut its exposure to its lowest level in years. The stock market behaves as if this were the case, with moves soaring and so far more than a month since hitting new lows. A small win, but it’s not for nothing. Big picture: The bias towards objective fairness is lower. It will be difficult to dismiss the multi-month recession scenario even if we don’t get it. The Fed is asking for months of data before easing back to hawkish intentions, and stocks are merely returning to the “fair value” zone rather than outright cheap. All are reasons to be cautious or keep expectations low. Still, with all that said, it’s still a positive signal that few seem willing to suggest a mid-June market low could prove consequential. Large hedge funds are decisive for net short-term index futures. Meanwhile, company insiders are heavily leaning to buy, which is often a final if not immediate bullish sign, as SentimenTrader shows here: Earnings reactions are typical combination so far, but with a hint of relief and a feeling that “could have gotten worse” overall. Currency is a topic, but the market tends to ignore that if it is purely about the movement of forex turnover rather than a severe lack of demand. on a 90% volume day on the NYSE, this immediately following a 90% volume increase on Friday would take its toll by some systems as a strong demand signal that should be respected. 24. Below that will be a plus, a drop below the recent range suggests better stability/risk tone.There is still much to prove for the bulls, but some “less bad” things are ahead. Earnings season, all else being equal, will pressure the VIX lower, with more divergence among individual stocks that could neutralize index-level volatility (that is, the what VIX is based on).