After this week's nasty pullback, tensions are high, and worried questions are being posed. That's to be expected. Before you slip into full panic mode though (which is the fuel for bad decisions), may we offer some perspective on the whole mess? We can't prevent the selloff, but we can tell you how to take advantage of it in addition to explaining what the bottom is apt to look like.  First though, let's highlight this week's best commentaries from the community. On tap this week are outlooks for InnerWorkings (INWK), Seacoast Banking Corporation of Florida (SBCF), Clearwire (CLWR), and Brookfield Properties (BPO).    Stocks In Focus The Bigger (& Unrecognized) Pictures for DSCO, SOMX, and CLWR Whether we're at the beginning of a major correction or at the end of a minor one, the spring/summer periods is likely to be weak for the broad market. Clearwire Corporation (NASDAQ:CLWR) may be a cure for the summertime portfolio blues. James Brumley explains exactly why.  Why These Stocks are Going Somewhere: KOPN, SBCF, ERES Looking for a way to tap the now-bullish volatility from the regional banking group? Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is worth mulling. Like so many other banking stocks, the April runup and the early May implosion have left behind a few bounce opportunities from some pretty solid stocks.  Three Long-Term Buy Considerations: CALP, INWK, BGCP We've mentioned before that commercial printing was one of the obscure beneficiaries of the economic revival. Dennis Askew took that theme to the next level by selecting InnerWorkings, Inc. (NASDAQ:INWK) as an outright 'buy'. Find out exactly what he sees that's so bullish about this now-recovering stock.  The Clues Are All There, If You Look - Reviews of BVF, BPO, and CNAM While it was the marketwide selloff that likely started to drive Brookfield Properties Corporation (USA) (NYSE:BPO) shares lower on Thursday, it was a move that was likely to happen anyway. How far does BPO have to go before finding a bottom now that the trend is in motion? Here's a likely answer.    Perspective on Thursday's Implosion. And I thought Tuesday's pullback was bad. Thursday's and today's selloffs make Tuesday's look like child's-play.  All told, the S&P 500 lost more than 6.1% over the prior three days (close to close), and as of yesterday's close was down more than 7.3% from the highest close of the now-defunct uptrend. The S&P 500 managed to fight back to 'only' a loss of 3.1% on Thursday, but is pointed lower again today (by about 1.5%).  Worse, at one point yesterday, the S&P 500 was in the red by 8.5%, bringing the high/low span for this two-week pullback to a whopping 12.6%.  Now that the shock is dissipating, the questions are starting to surface. That's good. Panic and irrational thinking are also starting to surface. That's bad, as it leads to be poor decision-making. Hopefully I can address (and help solve) both challenges today by answering your key questions about the pullback, starting with.....  Q: Is the pullback over?  A: Statistically speaking, no, we're probably not at a short-term bottom yet.  One of my chief concerns with the character of the rally since March of 2009 is how spoiled and arrogant investors got in the absence of any 'normal' (10%) corrective moves. The market is not usually this consistently gentle, on a historical basis. On the other hand...  The 'normal' 10% correction may be relic. Believe it or not, the 2003-2007 bull market didn't see any drops of 10% or more, nor did we see any 10% corrections between 1990 and 1997. In that light, this month's 12.6% dip from the high to the low may well suffice as a 'reset' of bullishness... since it's one of the biggest we've seen in a while (not to mention the fastest). The S&P 500's low of 1069 also touched the 200-day moving average line, as well as the lower 50-day Bollinger band, further bolstering the possibility that Thursday was indeed the bottom.  See the headache already? Bottom fishing is largely a coin toss, as there's little meaningful historical context.  My guess is the same though....a little more downside is on the way, after we see the obligatory dead-cat bounce. As painful as the pullback was, fear and doubt haven't peaked yet.  Q: Did we see this coming?  A: That depends. Bluntly, yes we did.... if you chose to pay attention to the clues and not be blinded by the euphoria of a never-ending string of gains.  The VIX, for instance, had been hovering at multi-year lows since mid-March, signaling that investors were less worried than they had been since May of 2008 (before things got really nasty).  The market had also gained a stunning 12% since February's low, on the heels of solid Q4-2009 earnings. The earnings outlooks, however, didn't actually improve by 12%. The S&P 500's projected year-end P/E ratios for 2010 soared from 14.15 to about 19.30... a 36% rise in acceptable earnings multiples on about a 6% increase in 2010's earnings forecasts.  No offense to those who were 'willing to pay a premium for growth', but what did you expect?  And the list of red flags goes on and on. The NYSE gave us a stunning 518 new highs on April 23rd... the biggest number since December of 2003 and October of 1997. The CBOE Equity Put/Call Ratio was hitting multi-year lows around the same time. You get the idea - we were starting to see optimism and bullishness you only see once every few years. That's almost always a sign of a top. Most investors ignored the signs though.  Q: Isn't this really the beginning of a new bear market, or the resumption of the old one, or evidence of a double-dip recession, or (insert the worst-case scenario of your choice here)?  A: I suppose anything's possible, but no, I don't think this is a sign of any stifling underlying problem, and here's why. Earnings - the ultimate point of owning publicly-traded companies - are getting better, and not just on paper. Were it just 'operating' profits on the rise, I wouldn't care. GAAP earnings are in the rise too... the numbers don't lie, even if the growth is tepid. Falling stocks don't necessarily mean falling profits.  It's the old short-term/long-term argument. Given enough time, stocks will be fairly valued. In the short run though, fear and greed have hijacked stocks. Don't make it any more than that (but don't ignore those short-term forces either.)  Q: What do I do now?  A: That depends.  If you're truly a long-termer and don't worry about short-term fluctuations, then just know your next brokerage statements are going to show you a smaller number than the prior ones. Don't sweat it.  If you're a short-term trader, odds are good that we'll see a snap-back rebound effort. Until the market can climb back above its 20-day averages though (the S&P 500's is at 1190), any rebound action won't mean much.  For both groups, I foresee even-lower lows before it's all said and done. I don't know precisely where that will be, but I do know that the 1100/1050 zone has multiple floors.... Fibonacci lines, prior lows, etc. Then again, the 1088 line offers pretty much the same. We'll have to look for supporting clues when/if the index reaches either of those two values. That could happen as early as today. Q: Did program trading and/or tick errors cause Thursday's meltdown? A: Yes and no, but it may not matter. The rumor is that one of the market's bigger stocks saw an errant trade price that triggered a slew of other sell trades (and shouldn't have) as part of a so-called 'program trading' package ....a collection of if/then trades that can involve dozens of stocks and hundreds of thousand of shares. One bad tick can start a selling avalanche, even if that tick wasn't a real trade. but.... While one errant/invalid trade can hypothetically trigger such a selloff, all the other stocks in that basket trade also had to be alarmingly close to their own breaking (trigger) point. Retail investors also had their nervous fingers on the sell trigger, in the shadow of Tuesday's devastation. So, as big as program trades are (about 1/4 of all market volume), they are not the culprit - stocks would have been that vulnerable on their own. Q: Any other advice?  A: Just this. The pullback has already drawn out the perma-bears, nay-sayers, and gloom-and-doomers who are going to try and use it as evidence in their argument that stocks could never, possibly rise again. Their messages are just as stupid as the ones that suggested you should be buying in early April because stocks were going to even further accelerate....forever. The market has not operated, and does not operate, in those extremes. It can defy logic for surprising lengths of time, but nothing is ever permanent.  Moreover, the permanency of those moves is largely a function of how strong fear or greed are compared to the strength of actual corporate success (i.e. earnings). That's it..... nothing more, and nothing less.  I say all that just to make the point that getting emotional, stressed, or anxious does you no good right now, so don't do it.  That will be tough to do, considering those gloom-and-doomers are trying to make the problem bigger than it really is. Your job is to look past the hype, and watch for fear or greed (fear, in this case) to fully crest. Once it does, then the market will return to a normal valuation. In the meantime, this dip is an opportunity to select stocks you'd like to own at some pretty cheap prices. It's not the end of the world, or the beginning of the next bear market.        We Value Your Feedback Got comments, questions or suggestions? 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