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Real Time Insight

 

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An Avalanche of Sell Orders!

My forward-looking query: To Editors and Subscribers alike... 

What fundamental catalyst moves first to END this slump?

(1) AAPL’s share price rises.  AAPL stock started to decline in mid-September, after it topped at over $700 a share.  It closed yesterday below $540 a share, a -20% plunge.  Given its huge market cap in the NASDAQ, its effect on the IT sector, and as a bellwether generally, one catalyst to the stock market -- a recovery in AAPL.

(2) Bond yields crumble in Southern Europe. In early September, a steep decline in the Spanish 10-year rate was a positive catalyst, going from over 7% all the way down to a 5.3% rate.  Unfortunately, since mid-October, this cornerstone indicator of European macro and financial stability has risen to 5.8%. Spanish authorities are holding up agreements to get European-wide aid.  They worry about strings attached.  How about a deal?

(3) Fiscal cliff resolved.   Wake up Government!  Investors are reacting negatively to the potential for a blown budget deal, followed by recession.  Sell stocks now and buy them back later, after January.  It looks smarter than hold and ride it out.  

(4) China stimulates.  Not co-incidentally, I think, the 10-year Communist Part Congress convened this week.  This is yet another source of uncertainty.  Decisions can be a positive catalyst.

(5) Good old-fashioned positive U.S. economic data.  Did anyone notice consumer sentiment hit a five-year high, and weekly claims data was very positive this week?

(6) Get it, John, we do not end the slump!  This is a bear market, not a correction.

(7) The slump is already over.

Finally…

How soon does your chosen catalyst materialize?  At what level does the S&P 500 sit when the corner is turned?

I hope to chime in merrily along our way.

Zacks Releases Their 7 Best Stocks for August, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new Zacks.com visitors free of charge.

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