A trader talks on his phone outside the New York Stock Exchange in the Manhattan borough of New York City, New York, October 2, 2020.Carlo Allegri | ReutersScared enough yet?Yes, it’s that time in a stock-market pullback when the question turns to whether enough concern has surfaced to displace complacency.Year-end rallies into the winter happen more often than not, but they tend to be born in a fearful fall when investors start to doubt a fourth-quarter flourish will happen.Last week’s 5.6% drop in the S&P 500 — which hammered many of the best 2020 performers and took the index back to a 9% slide from its peak almost two months ago — didn’t quite generate an obvious frightful crescendo.Yet the three-week sell-off has punctured the Street’s easy confidence of a fourth-quarter ramp, forced fast money out of the trendy trades and stoked more hedging ahead of the election. It’s a start.It should be said, the typical measures of investor attitudes haven’t reached fearful extremes, or at least hadn’t by mid-week. In fact, several readings are best characterized as a moderation of the elevated optimism from a few weeks ago. These would include the weekly Investors Intelligence survey of investment advisors, still showing near 60% bulls as of last week, and the National Association of Active Investment Managers weekly equity-exposure index, shown here.Yet options traders have shown more nervousness, with heavier buying of puts to play the downside. Corporate insiders have largely stopped selling their shares. And investors have stampeded out of faddish speculative plays such as special purpose acquisition companies. The CNN Fear & Greed Index is down to 30 on a 1-100 scale, well into fear territory. The ETF that tracks SPACs — Defiance Next Gen SPAC (SPAK) — is down 14% since it was listed just one month ago.Unusual bonds moveMore notable than outright anxiety, perhaps, is a sense of confusion over the unusual behavior across asset markets.Most conspicuous was the selling of Treasury bonds right alongside the stock-market weakness. Far from enjoying a safety bid, bonds backed off and the 10-year Treasury yield finished at 0.87%, a near-five-month high.As noted here last week, explanations for the lift in yields are varied, from expectations of big fiscal spending post-election to catch-up with other risk assets to a general reluctance of investors to bet big on any assets ahead of the election.Bespoke Investment Group after Wednesday’s 3.5% dump in the S&P 500 noted there had been only 24 prior days since 1962 when the S&P fell at least 3% and the 10-year Treasury yield rose. Does there need to be the usual panicky rush into Treasuries before stocks can make a bottom – or is this “sell everything” impulse sufficient panic in itself?”The breakdown, for now, in what has become the expected inverse movement of equities and bonds embedded in many investment models likely knocked some traders off-balance. The RPAR Risk Parity ETF (RPAR), which tracks popular hedge-fund strategies that combine stocks and bonds bought with leverage in search of smooth returns, has rolled over.Credit markets, though, have stayed relatively steady against the equity-market tremors, which arguably would not be the case if the market were undergoing a bout of stress over Covid shutdowns smothering the economic recovery.And Chris Verrone of Strategas Group is citing the relative strength of copper vs. gold and consumer discretionary stocks vs. staples as signs the market isn’t losing its grip on the economic-improvement narrative yet.Such a rethink certainly could be yet to come, of course. There was plenty of dissonance in the market messages last month. The ongoing, two-month retrenchment in mega-cap tech stocks seems in part related to a sense that they have pulled forward demand during the Covid hunker-down quarters. Netflix and Facebook said as much. Meantime, Microsoft, SAP and Amazon hinted at slower business spending on tech services.Yet the surge in Covid cases and re-imposed restrictions in Europe and some U.S. states are holding back the most obvious beneficiaries of a return to normal such as travel, chain-retail and restaurant stocks.The election, of course, is on everyone’s mind yet it’s hard to find something smart to say about its likely immediate impact on markets – except to sow hesitancy and headline-sensitivity in the preceding days.S&P 500 key levelsAnd, fittingly, the market finished last week in a way to maximize the ambiguity. The S&P 500 broke down below the 3400 level it had barely held the week before, which dropped it back into the September correction zone and had every trader watching 3230 as a decisive level. This is the September closing low, the peak from June from the initial rally off the March low, and the year-to-date break-even line.So, as if by script, the index dipped twice Friday into the 3230s before rallying in the final half-hour to finish at 3269. It’s a sloppy-looking chart, undeserving of the full benefit of the doubt, with some traders now eyeing the 200-day moving average at 3100 as a plausible true test of the bull market’s fortitude.Who’s to say the colliding storms of pandemic, politics and positioning won’t get us there in a more conclusive flush and flare-up of fear? In markets, trampolines can be disguised as trap doors and vice versa, so no wonder folks are scared to jump.Still, these moves don’t always rush to the “What if?” extremes, certainly not always in a straight line.The tape is getting pretty oversold by several measures. By Friday about half of all S&P 500 stocks were at least 20% off their high. Stocks have traded quite poorly off earnings coming in far ahead of forecasts, yet forward profit forecasts have nonetheless held up.The S&P’s valuation on year-ahead earnings estimates, while by no means cheap, is now down near 20 from 23 two months ago. And whatever the chances of a Covid vaccine approval now, it is nearer and no less likely than it was a couple months ago.These factors make it a perfectly plausible spot for a rebound attempt and suggest the risk-reward tradeoff for long-term investors has improved as stocks have come down — which is almost a law of nature. Even if the short-term action in the market is at least as hard to handicap as are elections and pandemics.