That is the question I've been hearing a lot lately. I don't hear anyone talking about stocks running to new all-time highs. I do hear about all the market woes, from tariffs and trade wars to discord in Europe to political turmoil in the U.S. My job, as a trader and as an investor, is to entertain a variety of scenarios based upon the data in front of me. As much as possible, I want to stay open-minded to what others are not looking at. Very often that is where an edge can be found.

For example, on September 24th my blog post highlighted caution signals for the overall market. A variety of supply/demand flow measures had turned decidedly negative. We've seen weakness in stocks overall since that time. Reports indicate record amounts of cash being taken out of the market, with 49% of surveyed investors expecting a market decline over the next six months. That is the highest percentage since 2013.

And, yet, with all the selling, all the negative news, and all the bearishness, we have merely roundtripped the early 2018 performance.

This chart shows the ES futures from May of 2017 to the present. Each data point represents 50,000 contracts traded. You can see that the entire bear period to date has, so far, been a relatively flat correction on a large time scale. That is not so unlike the 1994 market, which dipped in the first and last quarters of the year, forming a range. The upside break of that range lasted six years.

Thus far, the flow and breadth measures that I track are not telling me that the selling has dried up. I need that confirmation before more seriously entertaining the upside. But I'm open to both sides of the market and am monitoring day over day strength versus weakness to handicap the odds of a big picture break from the longer-term range. The key is stepping back and seeing 2018 as a range.