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.
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
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...
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.
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A light news day combined with heavy technicals weighed on the market.
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