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4 Reasons the Selloff Will Continue

The wipeout has continued into Monday and threatens to last even longer, if these indicators are correct

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Momentum Stocks

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The sweetheart momentum stocks of 2013 are causing a lot of tears early in 2014 as many popular holdings in the big tech and biotech sectors roll over into bear markets.

Over the weekend, Reuters warned that despite the fact many of these names have dropped into bear markets of their own — with Facebook (FB) down nearly 22% from the high reached less than a month ago — valuations in the sector are still extended. FB trades with a price-to-sales ratio of nearly 20, making it the most expensive stock in the S&P 500, which has an overall ratio of just 1.7.

These trades are among the most popular holdings among hedge funds, which are being pinched by the weakness in the euro.

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