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For stock market, it's welcome back to 2011

If investors feel like they've seen the current state of the market before it's because they have—back in 2011.

That was the year the Federal Reserve was winding down the second leg of quantitative easing—the monthly bond-buying program that has pushed the U.S. central bank's balance sheet past the $4.5 trillion mark. It also was the last time the stock market, in the midst of a 190 percent surge since the March 2009 lows, saw a correction as generally defined on Wall Street.

In that downturn, the S&P 500 dropped 19 percent—just 1 percentage point short of a bear market—as the European debt crisis raged and investors panicked that the Fed was taking away its symbolic punch bowl while the world was still in chaos.

Flash forward to 2014 and the Fed again is looking to end QE against a global backdrop that is less than appealing.

Parts of Europe are in deflation, growth worries continue in China, and Islamic extremists have added a new layer of instability to the Middle East.

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Perhaps predictably, stocks have wobbled, with a series of triple-digit up and down moves on the Dow industrials and another round of worry that the long-anticipated correction looms.

The Sigmund Holmes market blog charted out the 2011 market against its 2014 cousin, and offered this analysis:

There was an initial selloff (in 2011) that broke the 50 day moving average as the end of QE neared in the spring, but the market recovered its legs and made a new high in early May. The next selloff took the market down to the 200 day moving average, where it held once again. The next rally, however, failed to take the market to a new high. The ultimate selloff broke the 200 day and the market finally bottomed in October.

As you can see, we've already had the first down leg that broke the 50 day moving average and it appears we've now entered the second phase. If it follows the 2011 script, the current correction should be halted at the 200 day around 1900. If it continues to follow the script we should get a rally from there that fails to make a new high and then the final downdraft for a 20% correction. That would be around 1600 on the S&P 500, a level we haven't seen since mid 2013.

The popular correction forecast of a 10 percent or better drop stands a good chance of becoming the worst call of 2014 when all is said and done, and there's substantial reason to believe there won't be a repeat of the 2011 performance.

Economically speaking the U.S. appears to be in considerably better shape compared to a time when it was still reeling from the financial crisis. Earnings have continued to progress, and if anything the U.S. appears better situated than much of the developed world while the Fed keeps short-term interest rates anchored near zero.

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"We very well might be much closer to the end of this decline than the beginning and at 1,946, the S&P is about 7.9 percent away from our year-end target," Dan Greenhaus, chief strategist at BTIG, said in a note. "If we're going to be right, then adding exposure at this point is going to prove rewarding."

Still, Greenhaus points out that in some respects the market already has corrected in a 2011-ish way.

The Russell 2000 index, for instance, is off 10.2 percent from its March high, and 54 percent of the small-cap barometer's stocks are down 20 percent from their 52-week highs, while 19 percent are down 40 percent from that level.

As for the S&P 500, less than 30 percent of its members are above their 50-day moving average while less than 38 percent are above their 100-day moving average, "levels more or less in line with the end of previous corrections," Greenhaus said.

Ultimately, the market's behavior may signify not a substantial correction on the horizon but rather a market where volatility will become the watchword and where pockets of weakness could be more substantial than the whole.

The Sigmund Holmes post warns against too quickly dismissing the possibility of more market damage.

We'll see if this continues to develop in a similar fashion to 2011. I have a sneaky suspicion that it may actually turn into a bigger correction. There are a lot of people in this market who really don't want to own it and any hint of losses may be enough to send the hedge fund and mutual fund traders to the door in an effort to protect the old year end bonus. Stay tuned.