Buying on the dip? You may want to think twice as the market weakens

Updated

Just when you thought it was safe to wade back into the equity waters, the surf looks to be getting choppy again.

The market rally really hit a wall in October, with the S&P 500 ($SPX) losing two percent on the month. True, securities never move in a straight line and consolidation and corrections are a natural and healthy part of a market healing itself after a nasty trauma like the one it suffered earlier this year.

But there are some spooky signs underpinning the recent weakness that should give investors pause, says ever-bearish David Rosenberg, chief economist and strategist at Gluskin Sheff (and formerly of Merrill Lynch), who was probably as prescient as anyone on calling the collapse. As Rosie told clients Monday: "This is one dip you may want to avoid buying."

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