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Editor's Note:

(January 10, 2016)

Stocks took a beating last week. It was a global sell-off. Asia, Europe, and the U.S. equity markets were all hammered. It turned out to be the worst start to the year in history for the S&P 500.

Momentum is clearly bearish but history would suggest the S&P 500 typically bounces after a five-day, -5% sell-off (it was down -6%). Lately the normal historical trends have not played out well for bullish investors. This is a knife I would not try to catch.

Investors could be super cautious the next couple of weeks as they wait to hear the tone of Q4 earnings results. Will corporations provide a bullish outlook for 2016 or a bearish one? Will companies be able to beat Wall Street's already lowered earnings expectations or will they miss because conditions were worse than expected last quarter?

There is a lot of uncertainty in the market and Wall Street's initial reaction to uncertainty is always sell first.

No new trades tonight. I am adding HD, PPC, and STZ as new watch list candidates.