So, traders and their computers are back to worrying about China's growth rate. And about the state of the U.S. Economy. And whether the taper is a mistake. And about the health of corporate earnings. Or are they?

To be sure, the data out of China overnight got people's attention. Although the HSBC flash (preliminary) manufacturing PMI is not the country's official metric for measuring the health of the manufacturing sector, a great many analysts prefer the HSBC version over the government's because it is an independent analysis of the data. The bottom line here is the flash PMI was a surprise as the reading fell to 49.6 in January from 50.5 in December (and was below the 50.3 consensus).

In case economic data is not your bailiwick, PMI readings above 50.0 indicate that the sector in question is in growth mode while readings below 50.0 suggest contraction. Since this was the first decline in at least four months and was unexpected, traders noticed.

Worry, Worry, Worry!

Then, despite upbeat readings from the flash PMI's out of Europe, traders also noticed that the flash PMI in the U.S. was reported below analysts' expectations, that the LEI (the Conference Board's Leading Economic Index) disappointed, and that some big names such as Johnson & Johnson (NYSE: JNJ), IBM (NYSE: IBM), and McDonald's (NYSE: MCD) had produced some pretty unimpressive earnings reports.

So, whoosh, down they went on Thursday. The DJIA shed 175 points and is now an even 400 points below the all-time high water mark set on New Year's Eve. And the chart of the venerable Dow is starting to get a little "iffy" (yes, iffy is indeed a technical term). Take a peek at the chart below and see for yourself.

Dow Jones Industrial Average - Daily Prices

Our furry friends in the bear camp tell us that yesterday's close was important. First, the uptrend line that had been intact since early October was snapped. And second, Thursday's decline established a "lower low" on a short-term basis.

Yes, it is true that the Dow did survive an occurrence of a "lower low" back in December. However, those seeing the glass as half empty point out that there is no Santa Claus rally coming to save the day this time around.

But...

But, before you go out and start buying leveraged inverse ETF's on margin, it might be a good idea to take a look at the rest of the stock market picture.

Cutting to the chase, NONE of the charts on the major indices look like the DJIA at the present time. In fact, the Dow is the only negative chart in the bunch. Again, see for yourself.

NASDAQ - Daily Prices

Exhibit A in this argument is the daily chart of the NASDAQ composite. Looking at the chart below, the question "Downtrend, What Downtrend?" immediately comes to mind. While the DJIA has finished in the red the majority of days this year, the NASDAQ is one day off its most recent cycle high. And since every day can't be an up day, what's not to like here?

Next up is the chart of the smallcap index - the Russell 2000. Take a look.

Russell 2000 - Daily Prices

Even the most stubborn bear will have to admit that the chart of the Russell 2000 looks pretty darn good at this stage. A series of higher highs and a chart that slopes upward from the lower left to the upper right is the very definition of positive, right?

Next up is the S&P 500, which is a broad, large-cap, blue-chip index generally viewed as the best measure of the overall stock market.

S&P 500 - Daily Prices

Okay, this chart is clearly not as strong as the tech-heavy NASDAQ or the smallcap Russell. However, it is also worth noting that the chart of the S&P is not nearly as bad as the DJIA.

Even an amateur chartist can see that (a) the uptrend that began in October is still intact, (b) the index is quickly becoming oversold (see the stochastics at bottom of chart) and (c) the S&P has been moving sideways for much of the year.

However, to be fair, we must point out that a meaningful move below 1815 (the low from 1/13) could quickly become a problem. But at this point, it looks like the bulls deserve the benefit of the doubt - except over on the Dow chart, where the bears would seem to have a decent case.

The Takeaway

The key thing to take away from the charts right now is that the "worries" being bandied about currently may be a bit overblown. If growth in China or the U.S. was indeed a problem, all the indices would be in trouble. If earnings growth was truly a concern, then the NASDAQ, the smallcaps, and the midcaps would not be sitting near all-time highs.

The same can be said for the Banks, the Semis, and Health Care. If there was really trouble afoot, then we'd be seeing these areas break down. Instead, it's mainly the consumer discretionary and staples stocks that appear to be struggling a bit here.

Remember, stocks had become overbought coming into 2014 and a period of sideways action can be an effective way to work off that overbought condition. So, before you succumb to the worry, make sure that the "message" coming from the market indices is uniform. If not, your "message" may need to be adjusted a little.

This Just In... A Brand New Worry

However, this just in... there is a plunge taking place in emerging market currencies right now and fears that Argentina may be forced to devalue their currency is causing turmoil in the markets. While this type of problem can blow over quickly, it should also be noted that past emerging markets crises have produced meaningful declines in developed stock markets. As such, this remains something to watch closely.

Positions in stocks mentioned: none

The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program.

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