I had hoped that today’s email would be a buy recommendation for the latest addition to the Rhino Stock Report’s portfolio, but another steep day of losses for the broad market are forcing me to adjust on the fly and fill you in on what’s going on with stocks right now…

This week, investors have been experiencing an eye opening pullback at the heels of more drama in the Eurozone over Greece and its fellow PIIGS countries, Portugal, Italy, Ireland, and Spain. But when can we expect the slide to stop? Here’s a peek at what the S&P 500 looks like right now:

The index hit a top at 1220 back at the end of April, and it coming back down quickly toward a potential support level at 1150. Watch that level very closely today — if shares don’t finish at or above that rough level (the horizontal blue line above), we can expect to see the pullback continue perhaps as low as 1050 before it gets another good chance to hit the brakes. That said, with momentum veering down toward oversold right now, I think it’s likely we’ll see stocks cool their downward pressure today and tomorrow.

But the technical charts are hardly the only factor that’s moving stocks right now…

Fundamental data are going to be the real drivers for any sort of market movement we get in the next couple of weeks. Earnings are making a big impact on the numbers. Economic updates — like tomorrow’s jobs report — will have a huge effect on the numbers. And, of course, the situation over in Europe will continue to push the market to its whims.

For the past couple of weeks, investors have been concerned that the rally we’ve been enjoying for the last year and change was coming to an end and we’d be headed back for a second dip of recessionary price action.

While those fears are certainly warranted, I don’t believe that we’re seeing any strong signs of serious correction as of yet. That said, I’ll be watching the market closely over the next few days, keeping you informed if I believe it’s time to start positioning our stock portfolio for downside risk.

Like I said before, I’d hoped that today would be a buy alert. A week or two ago, I sent out a Watchlist with five potential Rhino Stock plays. Since then, I’ve narrowed it down to one stock that I’m bullish on this month, Applied Materials (NASDAQ:AMAT).

Obviously, we won’t be adding any positions to our portfolio until we have some notion of where the market’s headed in the short-term. Like I’ve said time and again, even the best fundamental plays can get shellacked in the face of an outwardly bearish market.

I’ll send you detailed analysis on the company when we’re finally ready to pull the trigger.

Until then, keep a close eye on where the S&P ends the day. A closing level below 1150 doesn’t mean you should liquidate your 401(k), but it does mean that I’ll be sending you a new alert with more details on the implications of that moment.

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Tags: market correction, stocks