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Like a mythic beast from the childhood story that magically arrives to life, people are suddenly experienced with the very actual chance that we may actually face a double dip recession.

Investopedia defines a double dip recession as: "When gross domestic product (GDP) development slides back to negative after a quarter or two of positive development.  A double-dip recession refers to a recession followed by a short-lived recovery, followed by one more recession."

Remember, in markets, perception is the one reality that matters.

Now, market contributors are actually nervous that the global recovery is in serious problem.  As we saw in the year 2008, recessions kill earnings visibility.  And when institutions have no profit visibility, they sell shares.  That is really so simple as that.

Let's not move further on of ourselves yet, although — it's still too early to inform if the nascent financial recovery is finished or just picking a breather.

We're incredibly oversold, and certainly due for several type of relief rally.  Though, it is really difficult for me to view this pullback being a fresh purchasing chance.

My concern is that I am struggling to find out where the following wave of huge development will arrive from.

Driven by extremely lax financial standards, and good old fashioned company thievery, China looks being in the border of its own banking crisis.  So I do not guarantee China coming to rescue of a global economy.

The US is slowly crawling back, but the average US customer remains 15-30% below water on their house, along with still stuck in personal debt.  As all that could be correct, yesterday's consumer confidence information are pointing to some further confident customer.  Consumer Confidence rose to 63.3, up from April's 57.7.  This was around 4 points improved than expected.

The only difficulty with this figure is that it does not take into account the recent market failure plus the insanity happening in North Korea now.  (North Korea sunk a South Korean Ship, they deny it, have threatened battle, and now have nowadays stop all ties with South Korea.)

The 3 keys to the comeback of the US customer are job growth, job security, and access to credit.

Most believe that as long as they have not been allow go yet, so therefore they probably won't be.  This is helping people believe safer in their employment.  But, a crashing stock market will not bode well for improved corporate employment.

Fresh financial rules working their direction through Congress will probably finish up limiting credit to small firms and individuals.  Thus I don't make out a fresh credit boom leading the best way forward anytime soon.

So, with no having access to simple credit with a gradual source of latest good paying job opportunities, I be able to truthfully speak that We have no thought where the fuel is going to come from to get customers spending again.

And we now have Europe …

The problems in Europe are very factual. These guys fired a trillion dollar missile on their sovereign debt problems, and it even does not appear to be enough.  The European banks are into serious, serious trouble.  If the European financial system slips back to recession, one can short the whole European bank sector into the ground.  I even now believe that the European banks are a short on almost any prove of strength.

So it really is hard to me to view the bull case here, however then again it always is while things seem this bleak.  As oversold as we are, I am not watching the kind of whole damage that one generally sees at a capitulation bottom.

So, long tale short, in lieu of an announcement of some sort of transformative strategy response, I am probably going to meet some rallies with uncertainty and make a mistake on the short side as opposed to the long side.

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Tags: banking, double-dip recession, gross domestic product, Investopedia