The End of "Easy Lifting"

Under the surface, things are starting to look dicey. Thursday, June 13th, 2013     The End of "Easy Lifting"   So long, market momentum… The "summer chop" deepens Plus: Gold's abnormal behavior   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner The markets ended yesterday's session considerably lower. But that's only part of the story… Under the surface, things are starting to look dicey. The momentum that propelled stocks higher earlier this year? Gone. As a result, we witnessed the Dow's first 3-day losing streak of the year. Yesterday's broad move lower also featured 72% of all U.S. stocks ending the day in the red. For the first time in months, a majority of them are now below their respective 50-day moving averages. "Buying is suddenly becoming less automatic given the backdrop of the Fed narrative," Knight Capital Group's Peter Kenny told Bloomberg. "It appears as though whenever the market pops its head up and trades in the green, institutions lighten up, hedge risk and provide supply. It appears as though the easy lifting is behind us." That's how you get days like Wednesday. The market opens higher—only to endure wave after wave of selling and a rough 4 p.m. landing. The easy lifting is indeed finished for now. Instead of buying every pullback that even slightly resembles a dip, traders and investors are now having second thoughts. Gains are not automatic. The summer chop is upon us. Now what? Get ready. It's going to be a grind. You have to prepare for anything and everything. So far during this seven-month rally, we're experienced three minor corrections that have resulted in strong upside moves. Now we have our fourth correction. So far, it has been the longest (and deepest) pullback of the rally. And it didn't bounce with the same force. Instead, stocks abruptly turned lower. This morning, we could very well see more downside action. It happens. Deal with it. This is the hard part. This is where you have to understand that 5% corrections are normal occurrences. "A 10% correction comes around every once each 2 years, and that we can count on three corrections of 5% over that same time period," Barry Ritholtz reminds us. If you're a trader, get ready to sell if the market begins to crumble. If you're a longer-term investor, you should have no trouble holding through the chop.     Rude Numbers Targets, Predictions and Wild Guesses   843 points fell from the Nikkei today. That's a drop of more than 6%. Meanwhile… 1,610 is where you'll find S&P futures early this morning. Even after yesterday's drubbing, the market looks poised to open around breakeven… 850,000 homeowners are now in the black. Higher home prices helped pull them out of the negative equity spiral. Now, less than 1 in 5 mortgages are underwater. $2.15 billion were the spoils for pharma-giant Pfizer (PFE) after its 10-year legal battle with Teva Pharmaceutical and Sun Pharmaceutical. Pfizer gained just 1% after settling the dispute over patent infringement on its acid-reflux drug Protonix. $600 million is how much Lululemon's billionaire founder Chip Wilson lost this week after shares of the yoga-apparel company tumbled 17.5%. The latest earnings beat couldn't stem a negative tide brought on by CEO Christine Day's departure.     Rude Trends When to Buy... When to Sell   Over the past couple of weeks, the Dollar Index has gotten pummeled like a slow, fat kid playing dodge ball. It just couldn't get out of its own way… Yet despite the dollar's big drop since late last month, gold has done absolutely nothing. It's stuck near $1,380 as I type. This is another big reason that makes me think gold has more downside left in it. It's just not trading "normally" these days. Gold should sprint higher as the dollar drops—not sit on its hands… Over the next several days and weeks, I'll be keeping an eye out for ways you can protect yourself in the short-term if gold continues its slide. You can follow along with these trades in the Rude PRO for free. Here's how to get started today. [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   The Income Play Rich Men Love (Hint: It's Tax-Free) What Obama Can't Do, These SIX Events Could More astonishing than the PC, mobile phone, and HD TV COMBINED     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary:         To end The Daily Reckoning's Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, click here to unsubscribe. 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