Kaboom! We saw a glimmer of it yesterday, but the selloff was unleashed in its full fury today. Stocks took a 1.6% hit, and moved into multi-week low territory. The irony is, the size and speed of the drubbing is actually the best thing going for stocks headed into Wednesday's session. How's that? I've mentioned to you before how the worst thing in the world the bulls as well as the bears could do when they've got a trend working in their favor is to pile into that move and cause it careen out of control. The longest-lasting moves are the ones that take shape at a gradual pace... so slow that most people don't even notice them. The only thing an overheated trend does is invite reversals. Well folks, today's dip could be considered an overheated one - a condition exacerbated by the bearish opening gap. That's why I can see a bullish pushback first thing tomorrow morning. I can even see that pushback getting a few days' worth of traction. When it's all said and done though, I don't see any dead-cat bounce actually going anywhere or doing anything other than bringing is back to square one, which is to say, we'll still be overdue for a regular bull market correction. As for the Syria thing, as tragic as it's been - and as ugly as some think it could get - I still don't think that's why stocks are falling. I think that's the convenient excuse the media is using; newsmakers desperately need to link an effect to a cause. Syria is the most obvious cause, but it's not the real one. See, we've seen this kind of geopolitical unrest come and go though. Remember when North and South Korea were on the brink of war last year? Remember a couple rounds of disruption in Egypt a few months ago? Those were supposed to be the beginning of dire global unrest too. Now they're barely even fading memories. No, I think the reason stocks are falling is mainly because the market as a whole has just decided now's the time to take some profits. Now, I'm not saying this to be calloused. I'm just saying it so you're a better-informed investor. The brewing pullback is only going to be a short-lived trend as most bull market corrections are, maybe lasting through the end of September. After that, we're planning on going bargain shopping. Let's get down to the details. For starters, yes, the S&P 500 put some distance between itself and that pivotal 50-day moving average line today. The VIX popped above its upper Bollinger band too. And, the volume behind the selling effort wasn't exactly light. Put it all together, and what you have is a pretty good bearish case. It's not a perfect bearish case, however. Like I told you above though, the size and scope of today's selloff is likely to attract bargain-hunters come Wednesday morning... the people who will buy on any and every dip. We can also see the S&P 500 found support at its lower Bollinger band, right where it should find support. The bulls may be able to use that line as a place to stage an offensive, at least for a few days. The gap from this morning's bearish open as well as the VIX's gap both bolster the near-term bullish case here too. We just don't see any bullishness lasting for any real length of time. The S&P 500 will do well to retest the 50-day moving average line at 1659.84, and if it does, that should prompt a rollover and kick-start the usual September decline. Again, that decline won't be the beginning of a bear market. Any dip will actually be relatively minor (even though it's going to feel worse while it's happening ) and should quickly turn into an opportunity. I think John Monroe explained it best in today's edition of the SmallCap Network Elite Opportunity newsletter: The abnormally light volume and what we discussed regarding volatility and market maker manipulation yesterday has given the Street an opportunity to take these markets lower. And, as painful as it might be for long-term bulls right now, I actually believe what's taking place is good for the long-term landscape of the markets. These markets have needed a deep pullback for a while now and it sure looks like we're getting it. At this point, all signs point to roughly 1,600 on the S&P before there's a possibility the bleeding may stop...I know, the media is starting to pull all of their negative banter out of their hats to help fuel the downside but it becomes extremely important right now to ignore the media and pay close attention to the technicals. That negative banter refers to Syria and the debt ceiling and the end of QE, by the way. More important, he's right. The media's painting a grim picture, but a pullback from here shouldn't be any more than a garden variety correction. If you'd like to get the rest of the insight SCN EO subscribers are getting, become a subscriber today. You can even take a free two-week test drive of the SmallCap Network Elite Opportunity newsletter. Here's how. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/ Closing the Books on Q2 Earnings Season The last time we looked at Q2's earnings was back on August 9th. With 91% of the S&P 500's stocks having posted second quarter's numbers at the time, earnings season was effectively over then. We've had a chance to tally the final-final numbers in the meantime, however, so let's go ahead and tie up this loose end. The final number? With 98.5% of the numbers now in, the S&P 500 'earned' $26.36 in the second quarter, which is just a tad better than the $26.34 the pros were expecting at the end of June. At one point, the projection was a per-share profit of $26.66. In that light, a minimal 'beat' and a severely dialed-down earnings outlook in the midst of earnings season translates into a disappointing Q2 earnings - I don't care how the spin doctors try to make it positive. As you might recall, the second quarter's bottom line wasn't what I was most concerned about with the recently-completed earnings season. I was more interested in seeing if the lofty growth projections for Q3 and Q4 would be reeled in. They were. Now the folks at Standard & Poor's say the S&P 500 should earn $27.06 (+12.7%) in the third quarter, and $29.05 in the fourth quarter, and $29.05 (+25.5%) in the fourth quarter. The projections had been $27.65 and $29.34, respectively, at the end of calendar Q2. Now, I'm glad expectations were reeled in a little. I just don't think it was enough. You guys have been reading the hit-and-miss economic numbers lately... durable orders are falling, new home sales rates are falling, consumer confidence is falling. Oh, there are upsides too. I just don't know that the upsides outweigh the downsides enough to foster 13% earnings growth in the third quarter and 25% growth in the fourth quarter. I have to figure other investors are starting to have their doubts too, and stand ready to push stocks down in September to get them right-priced. As it stands right now, the S&P 500's trailing P/E is 16.43, and the twelve-month forward-looking P/E is 14.2. Both are actually below the market's long-term average P/E, but there's still something uncomfortable about the forward-looking expectations. Later on this week I'm going to dive into a sector-based look at earnings (past and projected), as well as show you how some individual sectors are starting to emerge as leaders while others are now starting to lag. It won't mean much for your short-term trades, but for your longer-term positions it'll matter big-time. In the meantime, I want to highlight a couple of the site's most compelling write-ups from today. John Udovich took a look at a couple of stocks that are literally "out of this world." His article What is the Best Small Cap Space Stock? compares and contrasts satellite and payload management names Astrotech (ASTC) and Orbital Sciences (ORB), naming the better pick of the two. It's a niche industry to be sure, but not a bad one to have a little exposure to. James Brumley made a good point about Bio Matrix Scientific Group (BMSN). If you've been waiting for a chance to trade it - or had shelved it indefinitely - you'll want to see what's taken shape as of today. I've said this to you before, but I have to say it again... I'm sure there are plenty of you that not only have something to say about a publicly-traded company, but can say it quite impressively. The SmallCap Network publishing tools give you that chance to make your bullish or bearish case in front of a huge crowd. Whether you're looking to start your journalism career or just want to point out something about a stock nobody else sees, we invite you to get involved in the community and start posting your well-organized opinions. You may even see your comments featured here in the newsletter. Alright, that's it for today. Let's all go lick our wounds. The three-day weekend can't get here soon enough, huh?