We were already seeing fissures in the cyclical recovery. Bond yields were down when expected up, discretionary was weak. The harder question is if we return to an environment of rising bond yields.

Energy has been the leadership, improving since Aug/Sep/Oct. The market is a discounting mechanism saying 'energy was getting better regardless.' If we get any sell-the-news in energy/oil, that's what you want to buy, not a relief rally in consumer discretionary.

Be careful reading into monetary policy yet. Skeptical Europeans will be hiking into this in the back half of the year.

In moments like this, be alert to what acts differently than intuition. Gold not making new highs is a wake-up call; silver had a nasty reversal. Be alert where positioning is one-sided and price action isn't living up to the hype.

It's 'buy incrementally less America,' which contributed to rest-of-world outperformance. That trade was about Japan and Latin America, not Europe. European bank and defense stocks have started to soften.

EM call is more about Latin America, where stocks, bonds, and currencies are good. Capital is being attracted there.