The main thing we tell ourselves these days is that these are not normal times. But until this week, it seemed most of the chatter was normalish as if these were not the radically abnormal times they are; like articles about stock picking on the pullback to be ready for the next bull run.
This past week's earnings guidances began to talk about uncertainty and Chair Powell was cautiously and wisely uncertain. A few analysts have concluded that these are not normal times, but most analysts and managers and investors are pausing and hedging as you say.
What is normal is that bear markets have pauses and pullbacks on the way down, regardless of whether or not the proximal causes of them are normal. Just like a bull market can have a "correction", a bear market can have a "correction", which would be a 10% rise from some level. And of course just like a bull market there can be a number of moves counter-trend for small reversals less than 10%.
The biggest non-normal factor is that the tRump regime has pressed the Start buttons simultaneously on multiple contractionary events. They have not been felt economically yet but soon will be. Thus the total effect may be deeper than the regime and normal-minded people expect.
To my eye, the S&P chart looks more like a six-month top has formed and we are on the downside -- the tRump bubble you allude to. I think, but have no calculations to show, that "corrections" usually take less time than 3 months, whereas the sentiment change underlying the formation of a top takes time. The market rose for two years, then in the last six months it slowed down, levelled briefly and then slowly moved down (though there were some minorly dramatic 1% down days).
The Leading Economic Indicators are pointing down, but they have been pointing down for about 18 months or so, which makes it a muddy signal this time around. Current EI are neutral, if I recall. Lagging EI is up, but I think that is evidence of the tRump bump / top formation we passed.
tRump's April 2 ego-drama event will probably include a good hard thump on tariff taxes, though he may play games with pauses, suspensions, demands, deadlines and stupid "deal" trial balloons from the goobermint. There may be two weeks of churn or doldrums ahead, unless some hard data begins to show some contractionary symptoms.
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