Let's call a spade a spade... today was ugly. The bears drove the S&P 500 below a key technical support line today that they couldn't pull it under on Monday or Tuesday. For what it's worth though, there's that small part of me that's thinking after a 2% drubbing for the S&P 500 and a 3% blow to the NASDAQ, aren't we due for a dead-cat bounce? The chart below tells the story. The S&P 500's floor at 1840 - not to mention its 50-day moving average line - were obliterated today. This is the first real lower low we've seen since early February. With little else to stop the bleeding now, the bears now have the best opening they've had in weeks. Will the sellers take this opportunity to run the table? I mean, after all, it was only yesterday we were talking about how good of a shot the bulls had at pulling their fat out of the fire. Well, while anything is always possible, the sellers actually did quite a bit of technical damage to the market on Thursday. I don't see anybody being too excited about pouring money back into the market tomorrow, especially right in front of a weekend. That last bit of weakness tomorrow may well be what drives the final nail in the market's near-term coffin. And even if we do see stocks make a bullish effort tomorrow or early next week, it's less likely then ever to do any good. It took practically nothing to spook investors today. What's going to happen when something worrisome actually develops? You know what though? I'm still not ready to fully commit to an assumption of the worst. There was just something not quite right about Thursday's action, and my gut is telling me today's beat-down was more of a show or a stumble than a reflection of the current opinion. I'd really like to see how stocks react to a bullish pushback before committing. If the bulls put up a fight for a day or two and then that effort unravels and pulls the S&P 500 below 1840, it'll be tough to be anything but bearish for the remainder of April at that point. Until then, I'm willing to give the bills one more shot. And yes, I realize that Tuesday's and Wednesday's bounce was that couple of bullish days that ultimately failed to get a rally going. We may need to repeat that process a couple of times to seal the deal. We'll talk about downside targets once the bears confirm they're in control. As has been the case so often now, any bull market correction we experience here won't be nearly as painful as the media will want to make it out to be. Finding Value on the Road Less Traveled Despite today's steep selloff, I trust you all recognize that in the grand scheme of things it doesn't mean much. Yes, I'm talking about the long-term versus the short-term again. Don't worry - I'm not going into the diatribe. I'm just saying, let's keep it all in perspective. If you need the market to be higher a week from now than it is today, then what you're going through here is miserable. If you're only worried about the market being higher then where it is today two years from now, you're still fine... as far as we can see anyway. I put that backdrop in place so we could all soak up what I'm about to show you with the proper perspective. Yes, today's the day we're going to cross small cap sector fundamentals off the editorial checklist. There was a bit of a debate about how to convey the critical data to you. Fortunately, simplicity won the argument. We're going to boil it down to growth rates and valuations for each of the S&P 600's stocks' major sectors. We don't even need any fanfare - we can just insert those tables, beginning with trailing and projected growth rates. A couple of quick notes are in order. First of all, yes, some of the growth rates on the table seem crazy, like the tech sector's projected 100% earnings growth rate expected for Q1, and the consumer staples' projected growth rate of 109% for Q2. Bear in mind that some of the weak comparisons from 2013 have set the bar very low now. If you want some more meaningful data, look at the expected growth across all four quarters of this year, and next year's total expected growth. That being said... While there's something of an alarming footnote with a few of the very big growth numbers, it's pretty clear to me that the small cap technology stocks, small cap consumer discretionary stocks, small cap healthcare, and the small cap industrial stocks are the reliable hot spots within the market's small cap space. It's also worth noting that the small cap financial names are finally starting to hit a headwind. Of course, growth is only compelling if you don't have to pay a fortune to get it. What do the valuations looks like at the small cap sector level? Take a look for yourself (and bear in mind there's always something of a premium for small caps). Once again, tech and industrials are relative bargains, and the consumer discretionary names are palatable too. These healthcare stocks aren't "expensive" per se, but I don't see enough room for error with a trailing P/E of 33.3 and a forward-looking P/E of 20.8. And frankly, I just don't trust the energy sector's projected P/E ratio of 25.8. If those companies can meet those expectations and justify their prices, it would be the first time in years the small cap energy names have done so. As for what you should do with this information, well, I suppose I would start - and perhaps finish - my hunt for stocks to fill holes in my portfolio with picks from the areas that looked attractive above. Remember, a stock's sector/industry is responsible for about 40% of its movement. If you wanted to take a more broad-based approach though, you could always do that by using something like the PowerShares small cap sector ETFs, which offer you exposure to the small cap portion of the major sector groups [as grouped by Standard & Poors]. Personally I'm not crazy about them, but then I get to watch the market all day long and can keep a close eye on my stocks. If I had to think bigger-picture only on occasion, I'd probably utilize sector-based ETFs more. Anyway, I just wanted to give you a fresh look at the small cap growth and valuation data, because I'm sure nobody else would go to the trouble. Portfolio Update - Oy Vey Speaking of stock-picking, we've made a point of lightening up on our total trade exposure, whittling down our headcount to just four stocks. Good thing we did too, as most everything was under a lot of pressure today. That's not to say the market has completely unraveled, but it's time (again) for all of us to start thinking about risk-management. That's why we're going to go ahead and shed PICO Holdings (PICO) and Cooper Cos. (COO). It's got more to do with the market than these particular stocks, but that doesn't mean we want to be holding a couple of extra anchors when the ship slips beneath the surface of the water. We'll still be holding Genesco (GCO) and Astec (ASTE). We're walking away with about a breakeven on PICO, and about a 3% loss on Cooper. Given the environment, and the fact that we still recently banked an 18% gain on Frontier Communications (FTR) and 10% gain on Silicon Image (SIMG), we've got no complaints. We're not going to add any new names to the portfolio this week; why throw fuel on the fire? But, we are going to put AES (AES) and Valmont Industries (VMI) on our watchlist of potential stocks to buy in the foreseeable future. Interestingly, AES was up today when most everything else was down. To give credit where it's due, Bryan Murphy is where we got the Valmont idea. He makes his bullish case here.