Attention: This is Not a Stock Market Correction, It's a...

The bull market has warped your brain. April 14, 2014     Attention: This is Not a Stock Market Correction, It's a...   Combating market brainwashing Crumbling stocks scar investors Plus: The ultimate risk management tool   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner The bull market has warped your brain. For the better part of the past year, stocks have offered nothing but backslaps and high-fives. Your favorite names streaked higher. Your losing trades were few and far between. And most importantly, every single setback miraculously ended in furious buying and another round of new highs for stocks... That's why you're convinced we are now in the midst of a major market correction. But I have news for you... This is not a stock market correction. Not yet, at least. No, the action you've seen over the past couple of weeks is a minor pullback at best. That's it. After the market mercifully closed Friday afternoon, investors had the chance to stew over its downright awful performance over the weekend. The Nasdaq dropped more than 3% on the week. The growth stock rout continued. But a correction? Not even close... The NASDAQ hasn't breached its February lows yet. That's right. Even after last week's gut-punch, the tech-heavy index isn't even trading at 2014 lows. Keep this in mind as a new trading week begins. Now's not the time to try and pick out comeback plays. I'm very skeptical of any market rally. Every move higher is a dead-cat bounce until proven otherwise. Simply put, I do not think the market can just ignore the breakdown we're seeing in the Nasdaq... "The lost decade for stocks began with a 2000 collapse in the Nasdaq market as the dot.com bubble burst," writes technician John Murphy over at Stockcharts.com. "Since market bottoms were formed at the end of 2002 and the spring of 2009, however, the Nasdaq has been a market leader." Remember, the Nasdaq has been a critical component of the current bull market. Murphy points out that the Nasdaq Composite has gained 245% since the October 2002 bottom - compared to a gain of 124% for the S&P 500. The Nasdaq has also almost doubled-up the S&P since the March 2009 bottom. Now, we're seeing the overheated market leader begin to lag in a big way. That's a big warning sign you shouldn't ignore...         Urgent Tax Research Notice [last chance] If you HAVE filed your 2013 tax forms, please click here. If you HAVE NOT filed your 2013 tax forms yet, please click here. Either way, the research we have for you today could change everything you knew about taxes… And could instantly save you $1,000s this tax year, and every year for life. Simply click here for all the details.           Rude Numbers Targets, Predictions and Wild Guesses   18 out of the last 26 trading days have seen the NASDAQ Composite underperform the S&P, with the former shedding 7% since its March 5th peak. 44% of 974 million existing Twitter accounts have never actually "tweeted", highlighting the company's issue of user engagement. 16 IPO's this past week have raised about $5 billion collectively, according to Renaissance Capital. $1,323 is where you'll find gold futures early this morning. The yellow metal is holding strong above $1,300 as the stock market continues to drift lower... 1,812 is where you'll find S&P futures before the bell today. Futures are pointing to a flat open after recovering from their Sunday night low of 1,803...     Rude Trends When to Buy... When to Sell   "The S&P 500 index lost 2.65% between last Monday's open and Friday's close. It may sound hard to believe, but the past five days were the worst week for S&P 500 since June 2012," explains my trading buddy Jonas Elmerraji. "That's how one-sided the price action has been for nearly two years. What I think is more important, though, is the fact that the S&P broke through a key near-term support level at 1,850 on Thursday." Jonas has been spot-on lately in his market analysis. In fact, he was able to avoid the recent market drop entirely. He and his readers sat on the sidelines while other traders lost money... "I don't take any pleasure from the fact that markets dropped hard last week," Jonas continues. "But I do take a lot of pleasure from the fact that we weren't exposed to it. Just as a point of reference, the momentum-heavy Nasdaq Composite index is down 7.15% since we emptied our portfolio on March 20. "Too many would-be traders don't realize that technical analysis is the ultimate risk management tool. When markets become high-risk, the best move is often just to wait for them to switch back to high reward again. So, that's exactly what we've done." [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   Copy this "secret $200 blueprint" and you could live a wealthy, independent retirement New Release: How to give yourself a "health makeover" How the Gun Control Debate Could Provide Your Nest Egg     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. 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