| August 01, 2014 | | | | | |
 | | | Don't Ignore These
3 Big Sells | | | - Stocks slide--here's what to do
- Don't get stuck in these lame sectors
- Plus: A stock market mind-melt
|
| | | Greg Guenthner coming to you from Baltimore, MD...
 | | Greg Guenthner | Remember that correction we've been quietly talking about over the past couple of months?
Well, it might be right around the corner. Stocks waited until the last day of the month to nose-dive. The S&P 500 posted its first 2% down day since April--and the Dow wasn't far behind. Early this morning, futures continue to tumble.
Of course, everyone claims to have seen this move lower coming a mile away. But that won't stop the panic if we do begin to see momentum pick up to the downside. Guessing that a correction is around the corner is one thing--but making the right moves while stocks tumble is a completely different animal.
Today, I want you to forget about the big indexes and the big, red numbers they're showing on the financial news channels. Instead, you should focus on three sectors that look like strong sells. These are three groups of stocks that could have a lot more room left to drop-- whether the major averages find their footing or not this month...
First up is homebuilders.
Now, I know what you're thinking. I've been bullish homebuilders since last year. In fact, I told you as recently as a few weeks ago that a do-or-die moment for homebuilders could quickly send shares higher.
Spoiler alert: it didn't.
Homebuilders are sliding fast, breaking through critical support. They're trading at new 2014 lows as I type. Stay away from these stocks right now. There's plenty of room for them to drop much lower...
Next up on the sell list is solar stocks--another one of my favorite sectors.
Don't get me wrong--I still like the solar story. With solar costs getting cheaper by the year, the industry is starting to get competitive. But the story isn't matching up with the price action right now. With the Guggenheim Solar ETF (NYSE:TAN) breaking down below its 200-day moving average yesterday, its time to step aside...
If TAN loses $37, we could see an even bigger drop before the fourth quarter even begins.
FInally, we have the big consumer staples stocks. The Consumer Staples Select Sector SPDR (NYSE:XLP) was locked into a tight, uptrending channel since the first quarter. XLP is made up of all the mega-cap consumer names like Procter & Gamble, Coca-Cola and Walmart. These are the "safe" stocks investors were fighting to buy earlier this year as they fled the more speculative areas of the market.
But now, these names are also starting to break down.
XLP has lost its mojo. This once-stable sector is rolling over on high volume. That means its time to trim your holdings...
Don't get caught up in the hysteria surrounding yesterday's sharp move lower. If you keep your wits about you and listen to the market's signals, you'll survive--and even get the chance to book gains--while everyone else panics. | | | | | | | | | The shale boom is creating 2,000 new millionaires every year in North Dakota. But you don't have to be one of those lucky farmers or ranchers or surface owners to collect a generous cut. If you follow Byron King's six-step "road map," a mere $500 can become a seven-figure fortune -- as he demonstrates step by step when you follow this link. | | | | | | | |  | | | | Rude Numbers | Targets, Predictions and Wild Guesses
| | | | 317 | points fell off the Dow Jones Industrial Average yesterday. That's a drop of almost 2%... | | 32% | of stocks trading on major U.S. exchanges are above their respective 50-day moving averages. That's a huge drop from just a few weeks ago... | | $1,289 | marks the spot for gold futures. The yellow stuff is up more than $8 in early trading... | | 209,000 | jobs were added to the economy in July. Meanwhile, unemployment rose slightly to 6.2%... | | 1,920 | is where you'll find S&P futures just before the bell. Stocks are set to open in the red after yesterday's big drop... | | | | | | | | Rude Trends | When to Buy... When to Sell
| | | How do you feel after yesterday's selloff?
That's a serious question--and one you should be asking yourself. Psychology is so important in trading and investing. If you can't control your emotions, you're doomed to poor market performance--especially when things get dicey...
"I can't tell you specifics on how to play this but I can tell you how I avoided getting wiped out in 2000 and 2008. I simply stepped out of the crowd," writes Jeff Macke over at Yahoo! Finance. "This isn't a time for over thinking. It's a time for taking a measure of your emotions. If you're scared now you'll be more frightened later. Control your risk. If you didn't sleep last night you're too long stocks. If you're afraid of your statements it's because a little voice in your head knows you're taking too much risk. Get in front of that emotion before it reduces your intellect to that of the masses. Buckle up and look for opportunities. There are times for bravery and times to simply buckle up. History suggests the selling will end when we're all good and scared. We're not there yet but we will be, most likely sooner than you think."
So buckle up. It's a new month. Let's see what the market throws at us this time...
[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
| | | | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
| | | | | | | Additional Articles & Commentary:
Join the conversation! Follow us on social media:
| | | | | | | | | |
© 2014 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. 
No comments:
Post a Comment
Keep a civil tongue.