Markets do go down every now and then. I know that’s anathema (big word) to many but markets do go down. Markets do not necessarily need a reason. It can just be demand finally gets pooped out while supply picks up. What a concept! It can be that the S&P is up this year enough for a whole year. It can be the fact since the election, the market is up the equivalent of 6-7 years. It can be that sentiment has been and continues to be off-the-charts too bullish. It can be that the Dow is up 8,000 points since the election. Of course, it can also be a tick up in interest rates and higher commodity prices off the weaker dollar.

Choose any one or don’t choose at all. Just pay attention to price. And price in the shorter term, has been stretched and extended as far as we have seen in ages. A pullback would be as normal as CNN reporting on Russia. Maybe, possibly, could be a (God forbid) pullback started yesterday. And now we get an ugly open this morning. The horror of it all.

We were due. We are due. We are overdue.

A few notes:

Interest rate-sensitive stuff continues to weaken…Utilities, Reits and now Housing. This off of higher rates.

The A/D had weakened versus price last week…meaning fewer things were working as price went higher.

The VIX was moving higher as the market was moving higher. And now, the VIX has broken out off the lows.

We said on tv yesterday we would not be surprised if we saw up to a 2500 point during the year…and that’s just a guess  as we would rather interpret direction than predict price.  After all, that is not even 10%. We are not sure if we are starting one now. This could just be a short-term, few percent blip! Just know things are weakening here and need to be watched closely. Again, there does not have to be a reason. The world does not have to be ending.

A few thousand more earnings reports are set to come out. Pay attention.