Return of the Bear Market?

It might be time to ask ourselves an important question, is the easy ride over? This morning's (Monday, June 15) data suggests that we may not be as far out of the woods as we thought.

This morning the market began a notable sell-off backed by worse than expected manufacturing numbers and the surfacing of every bear this side of Smokey. So how bad are things and where are we going from here? Well it seems that that is anyone's guess.

We have been riding a wave of hope, ever since the middle of March, most signs have pointed towards a fast recovery, and those that didn't, investors seemed to ignore. Now that the Dow Jones Industrial Average is almost 2,500 points off its low with more than a 35% gain from the bottom, the market is showing signs that it is overbought and that a pullback was not only likely, but it is likely to continue, at least until we get our economic footing under us.

For a few months now it seems that no bad news was good news, but not anymore. With prices this high, the risk/reward factor is starting to tilt towards risk and more investors are being cautious. Many investors are also prone to take some profits at this point as some companies have seen doubles, triples and even quadruples off their bottoms, and no one wants to be caught holding the bag. The investors mood is starting to be a lot less bullish and losing the no bad news is good news mantra and starting the ask for legitimate signs of recovery.

Well for now the investors aren't getting as much good news as they thought, and when they take off their rose colored glasses that might see that we are in a but more economic trouble than we though.

I don't write this article with any thoughts on how to play this market, although I am trying to do just that in my portfolio, but I am merely writing it so that maybe you can take a pause and think for yourself where you think this economy might be going. All that I ask is that you do your due diligence and tread carefully, because I think most of the easy money has been made and you don't want to find yourself at the top of the mountain with nowhere to go but down.

Just as with everyone I want the markets to go up and never stop, but this has never and will never be the case, and just don't fool yourself into believing it is.

Here's to great gains.