First, the good news: we have safely put a grim January in the rear-view mirror, and we are still in the middle of the "Best Six Month" theory, (the theory that the Dow Jones Industrial Average consistently outperforms in the six-month period between November 1 and April 30th).
Now, here comes the bad news:
a) February is the "weak link" in the "Best Six Month" theory because it is one of the weaker months of the year;
b) we are dealing with several unfavorable trends: a stronger yen, up over 3 percent in January, with the Nikkei is down 10.3 percent for the year; and emerging markets are in tatters, particularly the major indexes in the BRICs (Brazil, Russia, India, China): Russia is down 9.8 percent, Brazil has fallen 8.2 percent, China's Shanghai has shed 4 percent, while India is down 3.1 percent.
The yen strength is particularly troubling, because many economic model are based on the yen weakening for the year.
There is some hope emerging markets may stabilize in February. Thailand, for example, just held relatively uneventful elections, the stock market rallied 1.5 percent there.
Elsewhere
1) Why focus on the Nikkei in correction territory? Hey, how about some of those big, multi-industry companies that sell all over the world? Take a look at the performance of companies so far this year, which have all fallen steeply:
a) Parker-Hannifin -11.9 percent
b) General Electric -10.4 percent
c) Dover -10.3 percent
d) Cummins -10 percent
e) Chevron -10.6 percent
2) The lousy weather, which is continuing into February, is now expected to be a major factor in the January economic numbers. Raymond James, for example, said January's nonfarm payroll number, out Friday, will be clouded by poor weather.
3) Stock exchange merger: BATS and Direct Edge have completed their corporate union.
—By CNBC's Bob Pisani