Oil is down, bonds are strong, and a voting member of the Federal Reserve says there is room for accommodative policy.
It is practically a flashing sign that worries about a recession are taking hold.
The warning signs are blatant and the market is taking the concerns very seriously.
After a little bounce action this morning, the indices faded but then bounced again when Richard Clarida of the Fed stated the central bank stands ready to act if developments show risk to the economy. He prefaced the comments by saying that the U.S. economy is in a "very good place," but he made it clear there is room for the Fed to act if needed.
The bounce on those dovish comments has now been completely reversed, which illustrates how poor market sentiment has become. The market loves to love the Fed, but board members aren't likely to act very soon unless there is some major economic development.
I continue to bide my time and am doing little. I'm not particularly worried about this downtrend continuing, as I am sure it will eventually lead to good opportunities again. Just think back to what happened when the last downtrend ended on Dec. 24.
It is the nature of the market to go through cycles, and if we embrace that fact, it is much easier to be successful.
The market is simply doing what it always does.