Howdy folks. Did you survive Wednesday's meltdown? I hope so, though if Wednesday rattled you, I've got a little bad news - we don't think today was just a one-day stumble. I've still got that nagging feeling stocks are finally going to start paying the proverbial piper from the big year-to-date gains. We'll slice and dice today's move for you below. First we need to tell you the rest of the story about this whole 'Sell in May' thing. Contrary to Popular Belief... Just so there's no confusion, yes, I'm the same guy who's been calling for a pullback here in the shadow of the recent rally. Much of my pessimism has to do with the calendar too; statistically speaking, the transition from spring to summer is usually a weak period for stocks. But, it's a misnomer to say that the whole time between May and September is always a bust. It is true that on average, May, June, July, August, and September are poor months. The nearby table tells the tale. Going all the way back to 1950, none of these months except July could be deemed a winner. September is an outright loser, most of the time. That in itself is worrisome. There's a little detail you don't hear about too often though - the average return for the WHOLE FIVE MONTH SPAN is a positive return of 0.5%. That's not a huge return for a five month period, so it's not like we're going to hire a marching band and have a parade here on the first day of May. But, we're also not going to run away scurrying just because of the calendar. We're simply going to navigate very carefully, choosing only the best ideas that can overcome a lethargic market environment. If you're wondering how the middle of the year got such a bad rap (i.e. "sell in May"), it may be because these five months really have doled out some of the market's biggest disasters. What you wouldn't know unless you really drilled into the data though - which we did - is that it's extremely rare to see two big losing months in a row in the spring and summer. Far more often than not, if one of these months was bad, it was preceded or followed by an equally good month. Bottom line? We may be bearish because the market's overbought, and at least partially because of the calendar. But, there's not a shred of empirical evidence that says we or you need to steer clear of stocks until October. Coulda Shoulda Woulda Did everybody see what Advanced Micro Devices (AMD) did today? The stock 'only' jumped 15%. If my math is right, the stock has gained 22% for the week so far, with most of it unfurling with today's session. That in itself isn't a show stopper. It's big, but not jaw-dropping. What's so shocking is that practically nobody saw it coming. Remember, Advanced Micro Devices has a miserable 2012 (the stock and the company). The corporation was on the wrong end of a withering PC market, but had yet to make any meaningful entry into the tablet and smartphone market. The stock fell from above $8.00 in early 2012 to well below $2.00 in late 2012, and acted like it was going to be stuck there indefinitely. Wrong. While the stock may have been on hold on the surface, under the surface it was quietly building up a monster breakout. You know who saw it well before the rally actually materialized? My good friends over at the SmallCap Network Elite Opportunity. Seeing the writing on the wall, the SCN EO picked AMD back on April 9th... a time when there wasn't a soul even close to thinking about diving in. For the fortunate traders who were subscribers at the time, they're now up 30% on the trade. I wish I could say something comforting like it was a stroke of luck. But, I can't do that - the SmallCap Network Elite Opportunity has made several picks of late that have done ridiculously well. If you're not a subscriber, you missed all of 'em. Look at it like this... one of those winning trade ideas could more than offset your entire subscription price. All the other winning trades are like free money. And if you're still not sure, take them up on the free two-week trial offer. Here's the deal. 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/ Uh-Oh Well, I can't say things unfolded the way I thought they would, but I also can't say I'm surprised about what happened on Wednesday. My expectation was for a full retest of the upper Bollinger bands - which for the S&P 500 was at 1605 today - before getting a bid dip. The S&P 500 fell nearly a full percentage point today without ever brushing that upper band line, as at least some of the profit-takers decided enough is enough. Now what? I continue to think we're due for a fairly significant (though fairly typical) bull market correction. I'm not convinced this is the absolute beginning of it though. The bulls are still out there in big numbers, and a lot of high-profile talking heads are still saying stocks are a buy. Between those forces and the fact that the Fed is still pumping the liquidity/stimulation spigot, there's a lot of kindling the bulls can put on the fire. I'm not saying stocks are going to move to new highs again, but I am saying it's unlikely any correction is going to be in a straight, downward-pointing line. Heard it all before? Yep, 'cause I've said it all before. But, something happened today that we haven't seen in a long time that strongly implies the undertow is finally turning bearish. I don't know how many of you follow the VIX, but I watch it every day. I watch it because if it's going higher, the market's generally being pressured lower. If the VIX is drifting lower, it usually suggests the market's bigger trend is bullish. The recent headache with the VIX is that it's just been drifting sideways in its middle ground, telling us nothing. Well guys and gals, though it was only a minor move, the VIX finally wiggled its way out of a rut today and started to inch upward. It was only a minor move, but after being listless for two weeks and wickedly erratic over the prior two months, this small move - which is well-formed deliberate - should alarm the bulls. [We've seen wild surges from the VIX recently, but they weren't a problem. This slowly-rising VIX is different.... it could be a true trend.] It's still a little too soon to say the VIX has signaled the beginning of the end. On the other hand, this emerging and well-controlled uptrend from the VIX is now officially on my list of things that could cause us big problems. I'll have an update for you tomorrow.