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The one thing the bull market needs to get back on its feet

Critical information ahead of the U.S. market’s open

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Stuck? Or just resting?

All aboard the worry train.

Carl Icahn was at the driving controls at midnight, screaming for more coal in the firebox as he lectured on the dangers of zero interest rates and high-yield bonds. That’s familiar ground for him, though you had to get past an endorsement for Donald Trump to get to that warning in Icahn’s “Danger Ahead” video last night.

But his comments come at a particular moment of angst for this market, after U.S. stocks closed at their lowest levels since late August yesterday. Few may be willing to put faith in any kind of run higher. Crossing Wall Street’s Eddy Elfenbein says brace yourself, because this latest round of selling isn’t going to be over until the fat lady sings — that is, until the VIX VIX, -2.90% closes below 20.

The VIX rose 16% yesterday, closing at 27.63, meaning there’s potentially more way to run yet for this latest rout. “It appears that the market wants to ‘retest’ the low from August 24, when the S&P 500 got as low as 1,867.01,” Elfenbein says.

Fuel for that test may trickle in from overseas. India’s central bank looks like it got panicked into a bigger rate cut than anyone expected overnight. That’s one sure sign of trouble for that emerging market, say analysts.

“This is the fastest-growing emerging economy, currently, growing faster than China. And yet its bank’s governor felt a rate cut was needed,” writes CooperCity analyst Louise Cooper. “It is therefore no wonder that equity investors are getting spooked.”

Count Goldman Sachs among those rattled. The investment bank cut its S&P 500 forecast for 2015 to 2,000 from 2,100, and also cut its earnings forecast. “Flat is the new up,” is what investors will be singing next year, said Goldman’s David Kostin in a note to investors.

If the bull-market faithful are looking for something else to hang onto, check out our call of the day. That is, if you can figure out whether we’re in the late stages of the bull game or just in the early days of a bear market.

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