We are not longer in the environment of 1, but it seems we aren't really in 2 also - so we have moved from 1 to somewhere between 1 and 2. That could be a sound recipe to have a fairly neutral investment position.

The caveat is that market quotes in fact have not fallen much - despite that lurking universal sense of uncertainty. The S&P500 is still 7% higher than it was just one year ago. So we have a sense of ambivalence, some dismay, but perhaps not true fear yet (such as you observe when the market quote has fallen 50% or so).

Which is perfectly in line with how a true long bear market (versus a crash) develops:

A) After the "It´s going up - as it always does" a phase of dwindling enthusiasm, higher volatility, ups and downs, many "getting out", but also many "buying the dips", with the market effectively loosing not too much = Jim´s obervation of "3 months after the top usually only 10% down"

B) Followed by less and less more market participants "buying the dips" as it´s seen more and more as risky, therefore less counter movements and the markets then truly going down from then on, accelerating as longer it last as real depression sets in and the "last men standing" are becoming less.

Your words "uncertainty", "ambivalence" for me perfectly describe where we are now: In phase A. Therefore no "buying the dips" for me, but the need for that which I never had in my life: Patience.