Stocks officially entered a bear market last week, at least as measured by the MSCI World index. But then that isn’t exactly news in a lot of places on the globe with various markets around the world having eclipsed the down 20% threshold long ago. The S&P 500 is so far avoiding the ursine fate, down a mere 15% at the low last week although if you asked the average investor or hedge fund manager I’ll bet they’d tell you it sure feels a lot worse than that. And they’re actually right in a way; the average stock was in a bear market before 2016 even started. And small cap stocks – the Russell 2000 – were down 27% at their low last week, well past the 20% barrier.

There isn’t much agreement on what is driving stocks down and as I write this the rest of the world is recovering strongly from last week’s downdraft. Japan, which led on the way down, was up over 7% last night which unfortunately still leaves it well short of where it started last week. And Europe is rallying as Mario Draghi once again promises to do something, anything when the ECB meets. That despite the notable lack of success he’s had stimulating the corpse that is the European economy so far. Safe havens, bonds and gold, are selling off in the futures markets.

So, is that it? Down 20% and we’re all done? Central bankers have suddenly recovered their credibility? Policies that last week scared folks to death are this week going to generate the recovery we’ve all been waiting for? Yeah, seems unlikely to me too. Bear markets, like their bull market cousins, don’t move in straight lines and if we bounce this week it is probably nothing more than a rally in a developing and not fully completed downtrend. That doesn’t mean it can’t be a strong rally or one that the brave can trade. Some of the biggest rallies in market history have actually happened within the context of bear markets.

But I suspect this bear market has more to go. All the market indicators are still pointing to more downside. The yield curve is still flattening, the long end of the curve outracing the short end. Bond yields, nominal and real, are falling, growth and inflation expectations diminishing. We might get a few days or even weeks of rising yields but the trend globally is inexorably toward lower and lower rates. Negative rates in Europe and Japan don’t seem to be having any positive impact – indeed maybe the opposite – but that didn’t stop a discussion of the possibility in Yellen’s testimony last week. Credit spreads are still blowing out, the lowest rated paper now yielding 20% above Treasuries. There isn’t a lot of lending going on in the junk space and certainly not at those usurious rates.