1. The market ended the third quarter at or near record highs. A lot of savvy investors have probably been selling off their holdings to lock in those returns.
2. The market might be declining even as the economy might be improving. Oil prices seem to be in a free-fall, driven mainly by the strengthening of the U.S. dollar. Why would the U.S. dollar be getting stronger as the stock market declines? A share of Company X might be "worth" more in U.S. dollars today than it was last week even as the dollar-denominated price of that share has fallen.
Everybody with cash on the sidelines has been waiting for a long overdue correction.
This might be it...or it might be a pause or profit taking.
With gold down and more bond outflows at the same time...It is a bit weird...
But if you look at what I think is the catalyst for this, Europe’s financial woes, I think it might be a correction.
My bet is that it’s not yet time to catch that falling knife.