The 'great disconnect' between the market and economy has persisted. Of course it's true that markets 'often' are based on perception more so than 'real' economic activity; but therein lies a problem.

Hence beyond the elevation of the market, one needed (or needs) to expect follow-thru on the legislative front, as we've often discussed. For now that is not off-the-table as some diehard opponents to tax-reform assert; but it's not helped by the shifted focus and chaotic politics that continue to disrupt what many believe needed to be a 'steely-eyed' persistence on economic growth.

Yes you have some of that going on; including important talks about NAFTA as well as Chinese trade infringements of American Intellectual Property. At the same time none of this is being expedited; and there is more doubt than confidence about what will occur when Congress returns from recess.

That's why, regardless of anyone's perspective on the political issues, value beliefs, or implied civic lessons of these tumultuous times, the stock market has counted on forward progress from politicians to be enablers of optimism for the near and far future. Absent that, you do have a market disconnected, almost at record levels (not the market's level, but the gap between realities and perceptions or expectations); which means a heightened vulnerability.

Bottom line: All the events, from Korea to North Carolina, tend to divert the President's attention from the economic tasks (for which he was elected at least primarily in the view of many); and further undermine prospects aimed at achieving 'much' during this year.

Political and geopolitical comments are not aimed particularly at politics, but primarily to extents they may impact not just psychology; but a fundamental deterioration of forward growth and profitability, which the entirely uplifting of both business spirits and the market, since Elections, has been based upon.

That is why for several months I've warned that deferring or delay of growth oriented programs (and tax reform), or their outright failure, would be a risk for a market that moved higher on 'perception' of what's coming; not reality.

That's why whether one agrees or not with the President, his opponents, or the tirades or defenses in the media; any undermining of economic progress does matter to the markets. And the markets are reacting after-the-fact 'as if' there was some sort of invisible economic strength underpinning the market.

Anything that derails the President's economic agenda is not bullish.

In sum: the 'Bull Trap' being sprung required the spike of over a week ago; then a drop; then a rebound to the 'congestion zone' and whether or not we saw a minor move higher (we got all but that and it was just a maybe); then the market would see renewed heavier pressure to the downside.