Without trying to be a Monday morning quarterback, I am not at all surprised by the market’s decline.

I remain hard pressed to believe that our domestic economy and the global economy remain on sufficiently firm ground that would justify the fact that equity valuations belong even at current levels.

That said, I long ago gave up “fighting the Fed” and other global central banks that have been engaged in pumping liquidity into the system in order to prop the markets in the hope of stimulating the economy. So where should we look for a measure of support in the market? 

I would look for the DJIA to retrace to the 15,000 level or very closely nearby so that the current pullback qualifies as a formal correction, that is a 10% decline from the market high that was put in at the 2013 year-end close of 16,576.

While not being surprised by the current price action, I am mildly surprised by the swiftness of this correction. We have retraced close to 1000 points in less than ten trading days. That pullback has also come in the face of almost every analyst and strategist putting forth positive projections for the year.

The question that I think will now begin to run through the market is the age-old one, “Is there a surprise out there?” Specifically, is there a bank or a fund — likely within an emerging market — that is in trouble, and might it be facing liquidity concerns that would cause a ripple effect?

Will keep my ear to the ground and share whatever I might learn and would ask readers to do the same.

Navigate accordingly.

Larry Doyle

Please order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.