The last dip in the market caused some damage to the psyche of market participants. So much so that they are exhibiting signs of reducing risk in a variety of ways.

The new funds will face stiff competition from PIMCO products that lead the fixed income market in an actively managed space.

The message from the yield curve has been that risk never really went ‘OFF’ in the markets, despite what the HYG junk bond fund was doing (which was dropping).

Bonds must be unbelievably dull. When the Dow broke 17,000 and when the S&P came withing a stone’s throw of 2,000 – media messengers enthusiastically reported the peachy particulars.

Over the course of this year I’ve been consistent in repeating that I didn’t think the market could suffer a correction unless breadth broke down.

This week we saw more of the same. Our core indicators strengthened while ancillary indicators weakened. The only core indicator that got worse was our measures of risk. Early in the week they were showing more concern from market participants even as the market moved higher.