The sell-off may continue, but don't panic

Experts say that the recent market action feels 'more like a repositioning' and that it won't stop anytime soon.

By MSN Money Partner Aug 1, 2014 2:28PM
Caption: Traders work on the floor of the New York Stock Exchange
Credit: © Spencer Platt/Getty ImagesBy Bruno J. Navarro, CNBC

Stocks -- already seeing their worst week this year -- could see a continued selloff in the coming days, O'Neil Securities Director Kenny Polcari said Friday.


For the Standard & Poor's 500 Index ($INX), "1,910 is going to be the 100-day moving average. That's going to be where at least it's stop and look and feel if it has anything there," he said on CNBC's "Halftime Report."


The next level of support is 1,857, its 200-day moving average, Polcari added.


"I don't think it's going to, but clearly until it starts to build a base somewhere in here, until the market gets over the erratic behavior that it had yesterday, it's going to continue to flounder," he said.


Ritholtz Wealth Management's Josh Brown noted that $4.8 billion have exited junk bonds.


"I think junk was one of those areas that was priced to perfection," he said. "Everybody was hiding out in there and trying to beef up the yield in their portfolios."


But the selloff was a sign of something looming on the horizon, Brown added.


"The big money is preparing for higher rates. It's not a prediction. It's not a call. It's not something that's imminent, but they are shifting their portfolios," he said. "People are starting to consider the possibility of not having quite as much junk, quite as much of these high-dividend stocks in their portfolio. They're looking for something else to do."


Citigroup Head of Markets for North America Suni Hartford also said that she saw a shift occurring.


"I tend to say it's not a correction; it's a direction, if you will," she said. "The market has known this was coming. This is the reaction to higher rates. It is finally that moment when we expect things to move forward with that direction in mind. We are seeing it across the board, asset sales. It's kind of a risk-off trade right now, but it's not panic.


"We don't see panic in any asset class, even high-yield. Certainly not equities. It feels more like a repositioning to us."


More from CNBC

45Comments
Aug 1, 2014 2:52PM
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When MSDNC tells you not to Panic, I think you may want to take some action...
Aug 1, 2014 2:54PM
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Thanks for the heads up.  I'm counting on you to tell us when to panic................NOT!
Aug 1, 2014 3:23PM
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Stocks will continue to go down, but I'm not panicking, I'm prepared.
Aug 1, 2014 4:06PM
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It is such a good thing that there is at least 100 year old history to reflect on to foresee what is coming down the train track. Worried? yes I am; not just for myself but for those that are scraping the pot bottom to have shelter and eat, let alone get to their minimum wage jobs. As long as noone yells "fire" we will weather the correction and move along. But we are long over due for a prolonged painful financial downturn - the "great recession" was only the prelude for what is to come. The other past cycles in the annuals of history didn't have the Fed creating additional national debt that my grandchildren will still be paying on in their old age. IF that barrowed (fiat in reality) money had been put to use to repair and replace this countries infrastructure we would be is so much better shape. That money would have been spent by the contractors and workers in every community they lived in or visited. Alas we will never have the financial opportunity again.
Aug 1, 2014 3:55PM
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When MSN says dont panic, then Panic. Now back to our everyday Kardashian story for  today.
Aug 1, 2014 3:52PM
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a few trillion here a few trillion there from the govt will have the market humming again
Aug 1, 2014 3:42PM
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So you sell your stock...where do you put your money then?
Aug 1, 2014 5:15PM
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I learned a long time ago that when someone tells you not to panic, it is time to panic. The bottom line is that the market is still extremely overvalued by somewhere in the range of  20-30%, more probably on the higher end of that range. The "experts" are telling you not to panic so they can get out and leave you with the larger losses. Don't take advice from the "experts". Use your own judgment and do what you think is in your best interests.
Aug 1, 2014 4:42PM
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Who's panicking? I've got over 20 years until retirement. I hate paying too much for my stocks.
Aug 3, 2014 12:57AM
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Isn't selling high the smart thing to do? Panic?  Why panic when you can sell at an all time high? People were panicking and losing sleep in early 2009. This is just the opposite.
Aug 4, 2014 7:15AM
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Typical King Obama statement... "CEO's don't have the right to complain..."  Such disdain for the First Amendment.  Does this man realize in America anyone can complain about anything?


This man needs to go.  Does this man even think before he says something?  Talk about Biden being a loose cannon.  His ARROGANCE knows no bounds.  This November Democrats will hear from "We the People..." about King Obama...

Aug 2, 2014 12:23AM
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Sometimes a good look at the world around you can sum things up. Russia under sanctions, Middle East in Chaos, African Ebola, American Immigrant Crisis, and so on. The entire civilization of this planet is being plagued by some form of turmoil. It just seems to me societies loose morals and the, "every man for himself", mindset of this world is bringing it to its knees. As well, the general consensus of the well educated middle class is, "so be it." Though, no one wants apocalyptic scenarios to actually happen, they generally are hopeful for the changes one could bring. The great equation amounts to the fact most of society can't see the light until the train has hit them.
Aug 1, 2014 5:31PM
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THE BEATINGS WILL CONTINUE UNTIL MORAL IMPROVES 
Aug 4, 2014 8:20AM
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The hype to buy stocks continues...
Aug 3, 2014 12:24PM
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The only answer is vote Republican in November.
Aug 1, 2014 11:20PM
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I for see,
More equity wealth extraction by the big guys 
who can borrow  at 0-1% and gamble 
in the derivatives/bets markets ($1,000 Trillion)
while the rubes flounder in the NYSE ($20 Trillion) !

The NYSE is a Front Running/INSIDE Information Bureau !
See, David Stockman "The Great Deformation of Capitalism !

The FDIC taxpayer Casino has made New York the 
Crime Family BANKS Center of the World !
Able to BUY any Politician FOREVER with 
$ Billions and Millions in TAXPAYER supported PROFITS
of absolutely STUPENDOUS numbers !
Aug 3, 2014 12:24AM
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I don't understand what he is writing "not having quite as much junk, quite as much of these high-dividend stocks in their portfolio".  My holding on NYMT, a big dividend payer, was up big time on Friday.  I checked the MORT a big dividend ETF and it was up too.  Actually the bulk of REIT is up Friday.
Aug 4, 2014 11:46AM
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The heavy action today so far on MSN....Is the "old article" about your kid or other kids WEARING logo'd shirts or clothes....Hmmm, yes free advertising..!!


Although we have returned to the DOW closing average of 16,400 or so, near the first of the year.

The S&P is still about a 100 points ahead for the year.

The Nasdaq up about 200 on the year, but did have some heavy runs a few months back.

And the RUT2K still slightly ahead, about 30-40 pts. on Small Cap stocks, but beaten up recently.

The VIX or volatility index jumped from about 12 to 17 last week on the closings.


I really don't think anyone should be in any "panic mode" for a correction, that we as investors were "expecting".

2014 has been a great year so far...

With FMV (monetary gains) far into double digit gains, which include about 3% YTD in dividends.

And an addition of net gain in shares, near 1500+ plus YTD.

And old Warren Buffet is sitting on a "cash hoard" of over $50 Billion in reserves, waiting to pull the trigger on some "good buys".

Some of us are making money, of course it's all relative, Buffet with 50 billion, us with 50 bucks.


It's been a very good year so far, anyone can give credit to who ever they want..?

And there were probably a few good buying opportunities this past week on a few good stocks or companies....BUT, there may be more coming...??

Pick your poison, pick your cliff....And above all, do your research. 

Aug 4, 2014 10:10AM
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All more hype to get the average person to buy stocks.  Stay clear of the market..there are better vehicles to invest money in without the risk and manipulation.
Aug 1, 2014 4:19PM
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When have I heard that before? Lets see...
Anyone consider that the last 5 years is a dead cat bounce? And we are experiancing a supercycle trending to create market history right now is a inflection point (aka cliff). Straw that broke the camels back. etc...etc..
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