Many investors believe that once we are through the shutdown and the debt ceiling debate, all will be well with the market. I don't see it that way.
Over the last couple of months, we have seen some disappointing numbers that I believe will create strong headwinds as we get deeper into the fourth quarter.
First, job creation has not been good. ADP reported on Wednesday that it looks like 166,000 jobs were added last month. That number is below most expectations, and the number of jobs created in the previous month was revised down.
(Read more: Private jobs come in light for September: ADP)
Second, housing has suffered because of the rise in interest rates. New home sales for August came in at 421,000, below estimates of about 450,000. The projected number of sales is now about 450,000 units. To put this in perspective, that number was over 1.3 million at its peak in 2005.
Another headwind is auto sales. The latest numbers have been a disappointment, with the steady uptrend we have seen in the seasonally adjusted annual rate of sales this year getting broken in September.
Finally, we have earnings season coming up, and most analysts have scaled back expectations. The outlook for holiday sales remains cautious, In fact, a recent survey of high earners has shown they will be very frugal this Christmas.
(Read more: Corporate profit outlook is weak and getting weaker)
Even though I don't believe the Fed will taper this year, I don't think the market can ignore these recent trends. That is why I am selling the S&P e-mini contract, and looking for a move down to the 1,610 area. I want to be short at 1,685 to 1,690. But I believe that if we break 1,665, the market absolutely becomes a sell.