Stocks could be in early bear market: Ned Davis

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

In the midst of the Dow's largest three-day point decline in history, one market research firm moved assets to bonds from stocks.

"Given the extent of indicator deterioration, last week's action has moved us closer to the latter conclusion (that the stock market is in the early stages of a bear market)," Ned Davis Research said in a note early Monday.

"The equity downgrade is primarily a response to the mounting risk indicated by our Global Balanced Account Model," the note said.