How to Fake Your Way to Comeback Gains

Flopping toward a breakout July 08, 2014     How to Fake Your Way to Comeback Gains   Flopping toward a breakout Emerging markets get tested Plus: Who's afraid of a big, bad correction?   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner As any soccer fan will tell you, embellishing injuries--usually called "flopping"--is all part of the game. And the country guilty of the most flops during the World Cup? That would be the host nation: Brazil. "There were 17 incidents in two games when a member of the Seleção was seen on the ground in pain--the most of any country," explains Geoff Foster over at The Wall Street Journal's "The Count" blog. "World Cup poster boy Neymar had five such 'injuries,' the most on his team. In every case he was back on his feet within 15 seconds." So Brazilian soccer players like to ham it up after getting kicked in the shins. Big deal. On the other hand, Brazilian stocks haven't caught anyone's attention--even though they've been flopping for years... Since 2011, Brazilian stocks have steadily trended lower. Over the past three years, the Brazil iShares (NYSE:EWZ) has dropped by as much as 45%. Over this same time period, the S&P 500 has jumped higher by more than 46%. It doesn't take a stock market genius to tell you which of these investments has won out since the financial crisis... However, Brazil looks like it's ripe for a comeback. Consider the fact that throughout all of the World Cup madness--along with the bad publicity painting Brazil as a corrupt, ill-prepared host plagued by problems ranging from crime to income inequality--Brazilian stocks have streaked higher. EWZ is up nearly 10% year to date, compared to the S&P's gain of just about 7%... Back in April, I called emerging markets like Brazil the best potential comeback story of the year. Remember, emerging market funds were crushed during the first quarter. Investors yanked more than $50 billion from emerging market stock and bond funds. After a strong run higher for U.S. equities, there simply aren't many eyes on emerging markets like Brazil. But emerging markets are finally catching a bid. If U.S. stocks begin to slide as we get into the dog days of summer, you could have the perfect opportunity to play a potential emerging markets bounce...         Do these excited billionaires know something you don't? We all know the government is hiding some very surprising secrets. But this one is completely off the charts... Silicon Valley billionaires... covert government investors... and even one of the most successful money managers of all time are all racing to get in on a piece of the action. To get an uncensored look at what's going on, click here now.           Rude Numbers Targets, Predictions and Wild Guesses   21 points slipped off the Russell 2000 index yesterday. That's the good enough for a 1.7% drop in the small-cap index--its worst performance since April... 17,024 is where the Dow Jones Industrial Average closed Monday afternoon. The big index kept its head above water, while most of the damage was done under the surface to momentum stocks... $1,323 marks the spot for gold futures today. Gold has gained more than $6 in early trading... $4.18 is where you'll find natural gas this morning. Natty continues to tank as we head deeper into summer. After dropping more than 3.5% yesterday, its beginning today in the red, too... 1,968 is where you'll find S&P futures before the morning bell. Stocks are staring at a red open for the second day in a row...     Rude Trends When to Buy... When to Sell   Do you wake up in a cold sweat at night, worried that a stock market correction is lurking in the shadows? Are you afraid to buy stocks because the market might dip? Do you think you have to wait for another big crash before its safe to put money back in stocks? If any of these symptoms sound familiar to you, allow me to prescribe a healthy dose of Barry Ritholtz... "Corrections are a normal part of any market cycle," Barry reminds us over at his Bloomberg View column. "Every market has regular pullbacks and consolidations. Since the market made its lows in March 2009, it has had nine corrections from more than 6 percent to almost 22 percent, beginning with a 9.1 percent decline five years to the day from tomorrow." That doesn't sound so bad, does it? "If these are a normal part of any market cycle, why do we fear them?" Barry asks. "Like the change of seasons, we should accept them as simply inevitable. Instead of fear, consider making preparations so that when the inevitable comes, you have a plan. The alternative is an emotional reaction -- and that's never good for portfolios." There's a lot of talk out there right now about how the market might correct this summer. Maybe it will or maybe it won't. I don't have a definitive answer. But I know that if stocks begin to slump, we can react accordingly. That's a whole lot better than worrying on the sidelines... [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   Secret "Oil Treasure Map" Could Make You a Millionaire How to Become Your Own "Banker" [must see]‏ Stunning 10-Year Forecast Just Released     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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