Don't Fight the Bear Market Blues

You are waking up this morning to market weakness across the globe. January 31, 2014     Don't Fight the Bear Market Blues   More market carnage Putting performance in perspective Plus: Volume clues point to lower prices   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner You are waking up this morning to market weakness across the globe. Asian and European exchanges are in the red. Ditto emerging markets. Stateside, traders are slamming S&P futures--which are pointing to another painful opening for U.S. stocks. With this month's crappy performance coming to a close today, it's time to start talking about an actual, honest-to-god correction. It's nothing to fear. In fact, if you keep your head up, you can continue to trade and book gains during the market's slide. But first, let's put the market's performance streak in perspective... "Recent stock market weakness has stoked fears that we've hit a top in the S&P 500 and a 'correction' is right around the corner," reports Bespoke Investment Group. In case you're curious as to why "correction" is in quotes, it's defined in this case as a decline of at least 10% that occurs after a rally of at least 10%. Easy enough... So why have these correction fears bubbled to the surface lately? Perhaps it has something to do with the fact that the S&P 500 has now gone a spectacular 835 calendar days without a 10% correction. "A correction of some kind is eventually inevitable, but timing when that 10% drop comes is very difficult," Bespoke muses. "There have been 4 rallies in the history of the S&P 500 that have had a longer streak than the current one, so this correction-free stretch is definitely not unprecedented. There have been two periods in the last quarter century that had a longer streak, including the period between October of 1990 and October of 1997." Is a much deeper correction (something between 10%-20% out of the question at this juncture? Certainly not. If the market continues to fall, don't fight it! Do not attempt to buy every bounce. This type of manic behavior could cause you to become broke and insane at the same time. Not a good combination... An old Wall Street saw says the markets take the escalator up and the elevator down. Downside moves are swift and brutal (as you'll soon see this morning). They're also volatile. You have to remain careful and ready to act on a moments notice--even on the short side. PRO readers can get my complete correction strategy guide below...         One Weird Trick To Cash In On U.S. Oil… Let me tell you about a weird trick people are using to exploit the energy boom happening in America. A trick that, for some reason, no one's talking about. That's a shame, because it could turn a tiny initial investment into your ticket to an early retirement -- for instance, George H. from Nevada was able to turn a measly $3,000 stake into $91,000 within months. Yet for some reason, most people overlook this profit multiplier. Click here for the full details.           Rude Numbers Targets, Predictions and Wild Guesses   80% of S&P 500 companies that have reported so far have beaten earnings expectations, according to Bloomberg. 63% gains in Facebook's share price-from-IPO come alongside 63% gains in quarterly earnings. 51% of U.S. stocks are above their respective 50-day moving averages. Teetering on the brink... $104 buys one share of Under Armor stock this morning. The athletic apparel maker saw its shares rise more than 22% yesterday after reporting strong sales... $947 buys one Bitcoin today. Bitcoin's price has stabilized over the past few weeks--especially when you compare it to recent market action...     Rude Trends When to Buy... When to Sell   If you're looking for additional clues on which direction the market might move over the next few weeks, remember to check out trading volume. During a healthy rally, you want to see big volume on days when the market is up. Right now, we're seeing the exact opposite. On the rare day that stocks move higher (like yesterday) we're not getting a lot of participation. In fact, every big-volume trading day so far this year has occurred over the past two weeks when the market has moved significantly lower. If you're looking to play a potential bounce, you have to watch trading volume to see who's participating in the move. The less relative volume you see, the less likely a move is going to stick... In today's PRO, I'm revealing an additional strategy you can use to continue to book gains during this corrective move. Here are the details... [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   How You Could Claim "President-Sized" Retirement Savings The Next Big IRS Scandal? This may be the easiest investment you've ever made     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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