Just something interesting to think about. Last week, the S&P 500 lost 5.4%. That was the worst weekly drop in over 5 years.
Guess what? Right now the futures are down 60 points. That's almost another 5% overnight and a 10% decline in the last 5 trading days.
Meanwhile, the IBD is busy speaking truth to power. Read below.
Individual stocks continue to tumble. Stocks that led the market's most recent rally have fallen especially hard. It's odd, then, to see analysts upgrade leaders that have started breaking down.
Research In Motion, (RIMM) Potash (POT) and Fluor (FLR) each garnered upgrades Friday. All three stocks fit the profile of the leader that has started to crack in heavy volume.
Analyzing the market's past winners shows how and when leading stocks top and start to roll over. These diving leaders are exactly the sorts of stocks you should be selling to protect your capital. Yet Wall Street continues to tout these names.
No one can know with absolute certainty which way the market will turn from day to day. But it's worth remembering the lessons of the past.
When Cisco Systems, (CSCO) Microsoft (MSFT) and others started selling off in 2000, many analysts urged investors to grab them each time they fell to new bargain prices. Those that heeded that advice learned a painful lesson: When the market goes into a downtrend, the only absolutely safe place to be is in cash.
Trying to outsmart the market has proven fruitless lately. Even defensive stocks like utility, food and beverage firms have gotten slammed. As it stands, this market has few, if any, safe havens.