Fwd: Here's Why Stocks are Dropping...

---------- Forwarded message ----------
From: Rude Awakening <rude@agorafinancial.com>
Date: Mon, Aug 4, 2014 at 6:51 AM
Subject: Here's Why Stocks are Dropping...
To: iammejtm@gmail.com

Headline fears grip traders August 04, 2014     Here's Why Stocks are Dropping...   Headline fears grip traders A turbulent pullback in the works? Plus: The bears are back in town   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Perhaps the stock market is dropping due to the Ebola virus outbreak. Maybe it's the fighting in Gaza... Or the potential for rising interest rates... There are a million reasons for investors to sell stocks. And depending on which financial news report you read, any one of the worries I listed could be the main culprit. Want more? Fine. Junk bonds, stock valuations, small-cap weakness, inflation, deflation, tapering, Russian sanctions, Portuguese banks... and that's just what I can pull off the top of my head. But in reality, the market's slump isn't pegged to a specific worry or geopolitical event. Stocks can't go up forever. And right now, it's clear that they need a break. It's that simple. "The S&P 500 ended Friday's session 2.7% lower than it started on Monday, closing the worst week for stocks in two years," notes our own Jonas Elmerraji. "No, that's not a typo - the last time stocks corrected that hard was June 2012." Jonas wasn't surprised by last week's drop. In fact, he sees more downside risk this month. "The S&P 500 hasn't seen a real test of its long-term trendline support level since back in February, so I'd expect a test of that price level sooner rather than later," Jonas explains. "Context is crucial for understanding corrections in the market, so here's the context: the S&P 500 can drop to around 1,880 without threatening the primary uptrend in stocks." If you take a step back and look at the market's uptrending channel, you can easily spot the levels Jonas is talking about... "Frankly, this is almost exactly how January's big correction in the S&P worked out," Jonas concludes. "That's why it's important not to fall into the sentiment trap when stocks move materially off their highs - from a technical standpoint nothing has changed here. So far, August seems to be following the mantra of 'new month, new market' that's been in play for a while now. I'd expect to see lower ground for stocks as the month progresses, but that's nothing to worry about at this point." While we're still officially in a "buy the dips" market, I wouldn't pounce on stocks just yet. Give the market time to fade and consolidate toward the bottom of its channel. If we get a bounce near support below 1,900, that will be your signal to try to play a bounce.         6 Simple Steps to Turn $500 into a Fortune in One Year You don't have to own an acre of oil-rich land to profit from the new American oil and gas boom. This free video shows you how to access 6 easy plays that could make you a millionaire… Click here now.           Rude Numbers Targets, Predictions and Wild Guesses   2,500 people are trapped after massive mudslides in Southern California, according to reports. Heavy rains have caused mud and debris to cut off access to Oak Glen and Forest Falls in the San Bernardino Mountains. $50 billion in cash is sitting in Berkshire Hathaway's coffers right now. That's the most cash Buffett has sat on at Berkshire since he became chairman more than 40 years ago, according to Bloomberg... $97.60 buys a barrel of crude today. Oil continues to retreat from its June highs. This morning, it hit prices not seen since early February... $1,292 is where you'll find gold futures this morning. The yellow metal is down about $2 in early trading... 1,924 marks the spot for S&P futures. Stocks are looking at a green open today after last week's drop. Will it hold?     Rude Trends When to Buy... When to Sell   The bears are back in town... We're already seeing glimpses of the big, gaudy market crash headlines after last week's dive. MarketWatch put out this doozy last night: Warning: That plunge in stocks is just the beginning Yes, an abrupt pullback brings out the big, scary news stories with quotes from cautious financial advisors about "possible continued downside action" and a spooked investing public. Then you have the pundits who've been bearish on the stock market for years trotting out the same arguments they've used for years. Add in some stock photos of bears fishing for salmon, and you have the whole package. Do yourself a favor and stick to the trends. Sure, it could get a little hairy out there. An abrupt move lower after months of smooth sailing has a way of tugging at the fear strings of traders. But if you keep your wits about you, there's no reason you won't survive--as long as you're willing to adapt to the new conditions... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   Prediction: Largest Economic Opportunity of the 21st Century How to Become Your Own "Banker" [must see] 80-year-old "Executive Dividend Program" revealed     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here. Please read our Privacy Statement. For any further comments or concerns please email us at rude@agorafinancial.com. 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Jeremy Tobias Matthews