As the stock market has entered the fourth month of a consolidation period, the overall picture is deteriorating and the S&P 500’s pullback has deepened.

This is consistent with the expectation of a difficult, volatile year 3 of a bull market.

The rise in volatility triggered a moderate alert in our model last week, which does not yet cause a sale of risky assets: The Meta Strategy remains 100% invested in stocks.

Relative strength causes the Meta Strategy Portfolios to move their equity allocation to international stocks – aggressive U.S. policy has forced a shift of the fiscal growth impulse to Europe.

A growth scare and renewed fear of a recession dominates the current narrative, but it is unclear what the actual effects on fundamental data will be.

Policy changes are only now beginning to be implemented and to ripple through the economy.