Fwd: Scared of Stocks? Buy Big Tech

---------- Forwarded message ----------
From: Rude Awakening <rude@agorafinancial.com>
Date: Tue, Aug 5, 2014 at 6:55 AM
Subject: Scared of Stocks? Buy Big Tech
To: iammejtm@gmail.com

Signs of panic buyin August 05, 2014     Scared of Stocks? Buy Big Tech   Signs of panic buying Waiting on a real correction Plus: "reliable speculation" gone wrong   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Investors might have treated themselves to a little panic buying yesterday afternoon. After slowly sinking into negative territory Monday morning, stocks caught a bid and the major averages snuck higher well into the afternoon. It looks like investors are taking the "buy-the-dips" mantra seriously. Just a couple of days of sharp downside action has prompted many traders to take a stab at buying stocks. The last thing anyone wants is to miss out on a good rally... Of course, it's probably a little early to go bottom fishing. After all, the S&P was only about 3% off its highs as of yesterday morning. That's hardly a correction. Heck, it's not even really a pullback. Most people have completely forgotten what an actual correction looks like. "Every time volatility spikes, the calls come out, 'the wolf is here!'" writes MKM Partners chief market technician Jonathan Krinsky. "While no one knows for sure whether the wolf is actually coming, there are signs that perhaps now, more than in a long time, he is close." Just as a quick reminder: The S&P 500 hasn't dropped by 10% in nearly three years. And last I checked, a 10% drop really isn't the end of the world. There's nothing wrong with the market hitting the reset button--as long as you know a few spots where you can ride out the turbulence. Yesterday, we talked about how you should give the market time to fade and consolidate toward the bottom of its channel. Your signal to try to play a bounce will be somewhere near 1,900--maybe even a little lower. In the meantime, it's important to watch individual sectors carefully. You have to know what's holding up--and what's breaking down. You already know that larger stocks are outperforming small-caps. That's been the case even before the major averages started to slip... But check out some of our favorite large-cap tech stocks. I've been high on these names for a while. Now, it's evident that many of these names are holding up much better than the market. Cisco Systems Inc. (NASDAQ:CSCO) gave us a nice little bounce off its 50-day moving average Monday. Keep in mind that more than 66% of all stocks trading on major exchanges are currently below their respective 50-day moving averages. But not CSCO. It's hanging tough and setting up for a potential bounce. Then there's a little stock called Apple Inc. (NASDAQ:AAPL). Apple is well above its 50-day moving average. It's climbing higher in a tight range while many other stocks are struggling to hang onto gains. Both of these stocks look like great hideouts if you're concerned about market weakness.         Underground Bank Could "Kill" Your Local ATM From New York to Sao Paulo to Hong Kong, cities around the world are installing an entire fleet of new ATMs, allowing millions of people to get cash from a new "underground bank." A venture capital firm predicted that the value of any "account" from this underground bank could increase by 500% by the end of 2014. So if you want to protect your money from the conventional banking system and target a 500% gain in the meantime... everything you need to know is in this message.           Rude Numbers Targets, Predictions and Wild Guesses   $211 billion has been spent by S&P 500 constituents on their own stock in 2014, Bloomberg reports, thanks at least in part to concerns that the market might slide lower... $1.8 billion is how much Gannett will pay for its remaining stake in Cars.com, according to MarketWatch. Gannett also noted it would spin off its publishing arm into its own publically traded company... $20 marks the spot for silver futures. The poor man's precious metal is down more than 1% in early trading... 165 points dropped from the Nikkei today. The Japanese index slid more than 1% to close at 15,355... 1,924 is where you'll find S&P futures just before the bell. Stocks are looking to open lower following yesterday's rally...     Rude Trends When to Buy... When to Sell   "It really doesn't help to see the increases in stocks after the fact," writes a reader regarding the big pops in Twitter and Yelp shares after their respective earnings announcements. "I mean, isn't that what we pay for-- someone with their hand on pulse of what might happen with companies like these? Surely there must have been some reliable speculation that their earnings were going to be impressive." Hmmm... The two stocks you picked as your examples tell the whole story. Twitter beat estimates and shares rocketed higher. It's a great story for those who bought shares back in May and June when the stock was in the low $30s. But wait--Yelp also beat earnings estimates. In fact, it announced its first profitable quarter ever as a public company. But after an initial jump in after-market trading, shares began to slip. Then they fell some more. By the next morning, the stock opened significantly lower. Then it dropped Friday, too. If you had bought shares the afternoon Yelp announced earnings, you would have lost about 10% of your money in les than 48 hours. I don't know what earnings will look like ahead of time. No one does (outside the management team and other insiders). Sure, we can put together our best guesses. But even if you handed me a company's quarterly report well before the announcement, there's no way to know whether investors would react favorably like they did with Twitter, or sell the news like we saw with Yelp. Long-term investors can wait out a bad earnings reaction. But for traders, it's pure gambling to buy shares the day of an earnings announcement. I'd leave the "reliable speculation" to those who are more willing to part with their trading dollars... [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   2,000 New Oil Millionaires Created Yearly - Become One of Them! How To Get In Before Stocks Go Public! Discovered: Tax-Free Income Made Easy     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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Jeremy Tobias Matthews