[Personal note: I will be floating around in the Bahamas for the next week or so. "Out of the Box" will be available from intermittent islands.]

Of course it hurts, it's a spanking. How else would it work?

- Breanna Hayse, Time Out

On a year-over-year basis the S&P 500 is up 12.4%, while the Dow Jones Industrial Average is up 16.0%. Just a little solace to calm you down, when you have recently been taken out to the woodshed. A past memory to reflect on, when you have a sore behind.

Of course, since the start of the year, the S&P 500 is now down 3.4% while the DJIA is down 3.9%. Everyone is blaming the bond market for all of this, as the 10 year yield is up by 12.9%, since January 2, but, using the Treasury 2.25 of 2/15/17, this is only a 3.0% drop in price. Here is some inconvenience, but hardly any major pain, so the bond markets blamers are pointing at a condition that does not really exist. I suppose they can't find anything else to blame.

If you want to blame someone, for our recent correction, the fault, in my opinion, would rest with the central banks. They created all of this "Pixie Dust" money and then the Fed stopped, and the ECB is backing away, with a possible ending in September they say, and now market participants are having withdrawal pains. We got addicted and now the supply is being cut off.

Our Chief Market Strategist, Art Hogan, points out that,

For more of a historical perspective, the S&P 500, since 1932, has corrected 5%, on average, every 7 months and corrected 10%, on average, every 26 months.

This is a very interesting observation, in my view, and tells us that the last year was really an aberration and not a normal year. We got accustomed to it, no doubt, but then La La Land is generally a comfortable place.

We also got accustomed to the lack of volatility. It was the re-runs of that old TV show, "Rawhide" and "Rollin', Rollin' Rollin," that must have caused all of the mischief. Everyone heard, "Yee Haw" and lost focus.

The VIX Index started the month at 13.47 and it closed yesterday at 32.06. That is a 58% run up in volatility in just nine days. The truth of it is, "You can run but you can't hide."

If you thinking the spanking is bad here, you might want to know what it is like over there. The Nikkei is down approximately 10% since the start off the year while the Hang Seng has fallen 11.1% in just the last two weeks. It hasn't been pretty!

While the equity markets have taken a beating, there are also other causes for concern. Many analysts and traders have turned bearish on WTI crude futures, according to a survey by Bloomberg. U.S. crude oil production jumped to an all-time weekly high of 10.25 million barrels a day last week, according to Energy Information Administration data. That followed a government forecast that American daily output will breach 11 million barrels in November, a year earlier than previously expected. The weekly U.S. output figure is now higher than the 10 million barrels Saudi Arabia produced, on a daily basis, last month. We may now exceed Russia in short order and become the biggest oil and natural gas producing country on Earth.

I, personally, am cheering, as I appraise this news. Ten years ago it would have been an outlandish dream that this would be possible. However, thanks to American technology, fracking, re-fracking and horizontal drilling have certainly made "America Great Again" in the energy space. Taxes were cut to spur growth and here is one prime example of a tax base that is growing appreciably larger.

The price of oil, like all other commodities, is largely determined by supply and demand. OPEC has done everything in its power to move the price of oil back up as their nations, in many cases, are solely dependent on oil and natural gas for their revenues. Many OPEC countries, in fact, cannot support their social programs, even at current prices, which is why I caution that social unrest, in some of these countries, may be about to boil over. If oil drops back down to the $40-$50 dollar range, once again, the burgeoning problems are likely to come sooner rather than later.

I also point to Italy, one more time, as a troubled spot. Their banking system is in general disarray, in my opinion, and their national elections are on March 4. It does not appear as if the current government will hold and Mr. Berlusconi and the Five Star Movement are both well ahead in the polls. This could be trouble not only for the European Union's third largest economy but also for the EU, itself, if either of these two groups gain power.

Brussels is downplaying it, of course, but I am of a different opinion. I think that real trouble is coming, and I am not suggesting any investments in Europe presently. Elections are less than a month away now and the Romans may revolt.

Just a note of caution.