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The Day Ahead: Investing Sins Will Cost You Dearly

"Investing sin," defined: Violating the will of the market, usually due to influence from outside sources

Unbeknownst to anyone else, in those rare free moments, I have been hard at work crafting a miniature investing manual. I like to refer to this as my own set of investing principles, sort of a bible for others to follow on the path to ultimate financial riches via stocks. The bedrock principles are edgy and in-your-face, as you would expect. One component of this investing bible comprises a list of "market sins."

It's important to me to shed light on how I view an investing sin. After all, the market is circling the bowl post-election -- and yet, we are chock full of cheery prognostications. Starbucks (SBUX) inks a deal to buy Teavana (TEA)? Get ready for a wave of valuation-boosting deal activity into year-end. Cisco (CSCO) pulls an earnings rabbit out of its hat again? Poof, every horrible aspect out of the tech space in the third quarter is worthy of a sweep under the rug. Remember, poor tech news had been coming from earnings warnings and the actual reports.

On Tuesday, I was not kidding when I characterized the market as being in a real-life nightmare -- that is, it's currently undergoing a daily drippy death, whereas I would prefer to have that one large capitulation event that would allow us to begin picking through the rubble. In that article, I had encouraged the masses to do simple math and concoct worse-case scenarios for each stock they're holding. I take my job as a market observer extremely seriously (too seriously, perhaps), and I only disseminate my views after careful a check of the probability trees drawn on my notepad from XYZ event. So it may be wise to come close to the computer screen and listen.

If you have chosen to sin -- to run counter to the will of the market (and from the helpful advice of yours truly) -- the payment for that sin has been excruciating of late. I have very little sympathy for sinners in general, and that extends to investing in most cases. The building blocks of the market haven't just loosened; they are now beginning to crumble, with sessions now logged below the magical 200-day moving average. As a means to halt your sinning propensities, pay careful attention to the reads on the next wave of information that has snuck up on the market, and which has done nothing to alleviate prior concerns about the fiscal cliff or decelerating expansion of corporate profit margins.

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