Ready to throw in the towel after a nasty four-day span for stocks? Monday's move was encouraging, but a serious lack of follow-through easily managed to reprise pessimism and a selling mentality. Is the assumption overblown though? We'll take a look at what really prompted this week's pullback, and what it may or may not actually mean.  Following that, the updated earnings scoreboard looks about the same as it did last week. When you break it down by sector though, you get some surprising (and not all for the better) data. We'll drill into that detail, and compare it to the same stats from last quarter.  And as always, the best picks and comments from the community are featured. EPIQ Systems (EPIQ), Apollo Investment (AINV), L & L Energy (LLEN), United Natural Foods (UNFI), and a few others are under the microscope for you today    Before Jumping the Gun  May I be a voice of reason? I know this hasn't been the best of weeks for stocks. In fact, it's been nothing but selling, selling, and more selling since Monday's big rally. Before any of us make a dire decision based on the last four days though, we really need to keep two things in mind:  Despite the pullback, we're on pace to only close about half a percentage point below last Friday's close. If we were going to hit a headwind anywhere, we hit it right where we would have expected; we've remained in the hunt though. Of the former, I can only say this.... not every ebb and flow from the market is a sign of what's coming. Sometimes, stocks fall because they're overextended, and sometimes they move higher because they're oversold. Sometimes they deserve to go higher because they're undervalued, and sometimes they deserve to move lower because they're overvalued. Much of the time, however, they just move for no real reason at all. Trying to attribute a specific cause is not only fruitless, but can be dangerous.  Translation? Just because the media says every point the market moves is evidence of - or caused by - something doesn't make it true.  Why they (the media) want to make this week's 0.5% dip something ominous is beyond me.... a 0.5% move is a joke compared to the swings we've been through over the last two years. Don't sweat it; wait for something meaningful if you want to panic or celebrate.  Now, as for the headwind being right where we would have expected it to be...  Though I don't talk about them much since they don't (or shouldn't) have much meaning to long-term investors, I'm a big fan of Bollinger bands. Though short-term in nature, I like to use them to find short-term and intermediate-term highs and lows that make for good entry and exit points of my long-term holdings.  I'm also a big fan of moving averages, as I know they tend to act as support and resistance levels. [They're terrible 'signal' tools, but great for confirmations and spotting bigger-picture trends.] My favorite moving average of all? The quintessential 200-day moving average line.  Care to guess where the S&P 500 topped out this week? Right around the 200-day moving average line (red), and within sight of the upper 50-day Bollinger band.  Before using that as justification to dump your stocks and head to the sidelines though, I'm begging you to at least wait and see what happens here before jumping to a conclusion. It can, and really should, require a bit of a drawn-out fight here for the market to get back above the 200-day moving average line, and then move on to the test at the upper Bollinger band. In fact, this was going to be the battle ground ever since the rally began in early July. Many traders knew it too, which is why the pause is setting in now.  In support of the still-possibly-bullish theory is the fact that the SPX remains above its short-term 20-day line as well as above its intermediate-term 50-day line. Pont being, this week's weakness is hardly a new downtrend yet.  Obviously things can and might change at any time. Before we assume the worst though, let's at least let the market tell us stocks are headed lower in a significant way. Who knows - the market may surprise us with a rebound from this week. Such a move is still well within reach.  Helping you get more out of the market, James Brumley Editor - Small Cap Network    Earnings Scoreboard Not much really changed in terms of the hit/miss rate. We're still seeing right at 2/3 of companies top earnings estimates, less than 10% coming in as expected, and about 1/4 fall short of outlooks. Though this past week saw the scales tip slightly away from the 'beats' and towards the 'misses', it wasn't a significant shift (though the market sure didn't act like it was insignificant).  That being said, only about 1700 of the 3000 companies we're tracking have posted numbers, so we're only a little bit past the halfway point for earnings season. A lot can happen in the meantime. And, you may recall that the problematic earnings shortfalls from Q1 didn't really start to materialize until the latter half of that period. One has to wonder if last week's slight tip towards 'not as good' is a similar transition into less-impressive earnings stats. It's still too soon to make that conclusion, but it's not too soon to plant that seed.  In any case, some interesting hit/miss statistics at the sector level.....  While the broad market may be posting the typical number of beats and shortfalls, when you break those down by sector you get some surprisingly-disparate results. For instance, more than 80% of cyclical stocks have topped earnings forecasts, while only 60% of oil/gas stocks have topped analysts' estimates. The nearby chart looks at all the major groups. What's so interesting about this quarter's results is how they look so different than last quarter's numbers.  Oh, the cyclical sector rocked and rolled in the first quarter as well, with a whopping 93% of its names topping estimates. Technology stocks were in that fight last quarter too though, with 90% of its stocks outperforming forecasts. Both are still leading the race, but both have tapered off their pace.  And unlike now, energy made bullish waves last quarter, with 77% of its stocks coming in better than expected, versus only 60% this time around. Similarly, 70% of financials beat expectations last quarter, versus only 60% this time around..  On the flipside, while it's still something of a disaster, only 44% of telecom stocks beat the street last quarter; at least 60% of them topped forecasts this time. The consumer staples group also improved its beat rate, from 71% to 76%.  If you're a believer that relative optimism or pessimism drives stock prices, then the value of this information is clear - industrial and cyclical stocks should have a pretty easy time moving upward on earnings news, while energy and financials should struggle more than their fair share thanks to their shortfalls.   From The Community  - Latest Commentary - Today's Best Bets You've Never Heard Of - PSSI, ASPS, & IFSIA in Focus  Did the shape of yesterday's bar for PSS World Medical, Inc. (NASDAQ:PSSI) serve up an important 'tell' about what's next for the stock? James Brumley thinks so. Find out why.  Why the Rush to Buy These Stocks: EPIQ, SCLN, NAVR EPIQ Systems, Inc. (NASDAQ:EPIQ) has made its way out of a rut and back above all the key moving averages.... and it's staying there, building up some steam for the next bullish leg. Dennis Askew tells you why.  Is Market Topping Again? It's the million-dollar question right now, and Chris Vermeulen answers it. Don't be a dear caught in headlights - here's a real, tangible, and understandable scenario for the broad market.  Seize the Market: MKTX, ZAGG, AUDC You may want to seize Zagg Inc (NASDAQ:ZAGG) after reviewing what Dennis Askew has to say about the electronics accessory retailer. There's a reason it's been in rally mode, and is back above it's 200-day moving average line.  Small Caps Almost Good Enough For Grandma - Looks at AINV, PDLI, and GOL While it's ultimately granny's decision, you may want to suggest Apollo Investment Corp. (NASDAQ:AINV) as a way to draw some dividends while also garnering some opportunity for growth. James Brumley has the whole scoop on Apollo, along with a couple of other aggressive dividend/growth picks.  - Newest Picks -  United Natural Foods, Inc. (Nasdaq:UNFI) - Long: As Jason Okamoto describes, United Natural Foods is 'Food processing worldwide'. He also added a company bio here.  NovaGold Resources Inc. (AMEX: NG) - Long: Christian Sanchez knows NovaGold is risky, but also views it as highly worth it. Sanchez is allocating 5% of the portfolio towards NG.  L & L Energy, Inc. (Nasdaq:LLEN) - Long: Mark Kingston says L&L Energy is in the driver seat, enough so that he's buying it. You can get the whole scoop with his background info on the company.    We Value Your Feedback Got comments, questions or suggestions? 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