Persistent price pressure prevailed as payback for absurd optimism we warned about in recent weeks; especially targeting 1st half February as a time for risk; including more areas of concern than I especially care to yet again summarize.

You all know the issues; ranging from 'rates' (at the helm of the group of risks) to China (which nobody reports about as having another liquidity crunch); to politics (the FISA memo is out; it's really not a market issue aside some folks thinking so, thus also keeps bids pulled). (One has to ponder whether the 'real' reason the institutions opposed Trump wasn't so much 'him' vs. any love for Hillary, but the idea that 'swamp cleaning' would actually refresh and reform the comfy hierarchy in Washington.)

In general an S&P correction has been overdue, and hints periodically have been seen for months; since the Fed made clear the unsustainable prior policy modality; as well as rotational sector rotation. Oil stocks and a periodic comeback spreading into general optimism (classic late cycle behavior) dominated too; and that's how we got the above-trend run-up.

The VIX was never broken (contrary to ridiculous arguments which also talked of permanently high plateaus and more similarly heard historically at important topping phases). All of it just reflected a forecast market run 'to the moon', called for "if Trump won"; of course well over 14 months ago. As I've been cautioning lately; not now zooming off into interstellar space, as late-comers have been suggesting. The journey 'just' to the moon was more than sufficient; except for the greedy (fairly typical after a move; but always dangerous to chase after 'confirmation' of strength).

In sum: Perhaps most notably I was sort of stunned to hear respected Quantitative Analysts who were correctly pinpointing 2.6 on the 10-year as an 'inflection point for danger', switch their pitch to bullish on equities just in recent days. That made no sense to me; as even though I've said rates are not so high as to impede business (just the opposite actually, as they affirm better conditions in the eyes of businessmen); but they're high enough to impact capital flows and perhaps trigger competitive or higher rates abroad as 'too much' foreign capital flows to the USA (from their perspective, not ours of course). Hence China's new 'crunch'; and why Emerging Market countries are already hiking rates. Hints coming from Germany and others also. Plus part of it is a reticence by our Fed to bloat the Balance Sheet more; so that itself presses rates somewhat.

Bottom line:  We've outlined the concerns daily; just review extended remarks, including emphasis on a break of some sort in February's first half, relief tries or not (tricky to say there wouldn't be and there were this past week; and are likely in the new week too; regardless how heavy the initial follow-thru selling).

The idea for us has been for investors to worry more the return OF their money for now, after such a forecast move of over a year; than to chase for more return ON their money. Prudence has proven appropriate.