The stock market bulls have been right for almost six years. They have been crushing the bears since March of 2009. It hasn't even been close. During this time, the S&P 500 has gone from 666 to a peak of over 2,000 in mid-September of this year. What about now? Right now, there is a battle going on between fundamentals and sentiment. On the positive side, the economy is nothing like it was back in 2008 when we experienced a global financial crisis. The bubble excesses in real estate, finance and credit have burst and resumed a more reasonable shape. The U.S. economy has recovered and is now experiencing low unemployment and strong underpinnings for growth. The underlying fundamentals for the market and the economy appear sound. But there are also several negatives weighing on the bull market. For one, the "Fed Juice" that had been pumping through the veins of the U.S. economy is being taken away. Quantitative easing is coming to an end, and there is the prospect of higher interest rates in the coming year. Another overhang on the market is the stalling recovery in Europe. Europe was not as aggressive as the U.S. in fueling economic recovery, and now they are paying the price. Economic growth in Europe has sunk back to levels so dismal that the European Central Bank (ECB) and president Mario Draghi might have to cook up a batch of European stimulus of their own. This could help Europe stave off recession and help calm nervous investors. So far, Draghi has said no to QE, European Style, but he may be left with no alternative. The downturn in Europe has caused the MSCI EAFE Index Fund EFA, -0.73% to technically unravel and plunge into a steep downtrend. Thanks to problems in Europe, slower global growth, and concerns about the economic impact of Ebola, market sentiment has turned sour, and volatility has increased dramatically. The concern is that these global ills could jeopardize the health of our economy and markets. Usually hawkish St. Louis Fed President James Bullard is even proposing that the Fed might need to consider delaying the end of QE. Nothing like a market correction to get the Fed's attention. Over the last month, the market suffered a correction of more than 9%, before rallying back to just below the 1900 level last Friday. So given the current market environment and the heightened risk and volatility, what is an investor to do? Page BreakHere's what I am doing Currently I am 55% invested in sectors and stocks that are still working in this market. Of the 60 equity sectors I track on a daily basis, here are the top 10 this week. Data from Best Stocks Now app What's working? Biotechs, REITS, utilities, consumer staples, pharma and health care lead the pack. Typically these sectors are defensive and pay higher dividends. I am not a fan of bonds, but the top-10 asset classes of the 34 I follow are all now bond related. That is a good indicator of how negative the market sentiment has gotten. With the 10-year bond yield hovering a little over 2%, the bond market is currently pricing in no increase in interest rates. Data from Best Stocks Now app Rather than hold bonds (I am a market timer, not an asset allocator), I am currently 10% allocated to Inverse ETFs, such as ProShares Short Dow30DOG, +0.87% ProShares Short S&P500 SH, +0.69% and ProShares Short Russell2000 RWM, +1.36% I am also currently maintaining a 35% position in cash. The market needs to hold here, or there will be further money-making opportunities in inverse ETF funds. The good news for investors should this bull market deteriorate into a full-blown bear is that there are a lot more market tools at our disposal these days. The good news and the bad news The good news is that the U.S.economy remains in decent shape. This is especially the case if you compare its condition to the one preceding the last bear market. The bad news is that market sentiment has deteriorated considerably. A lot of big investors are worried that Europe, Ebola and a global slowdown in growth will drag the U.S. economy with it. The 67-month-old buy signal is still in jeopardy, but for now, the bull is hanging in there, barely. The Fed may ultimately come to the market's rescue. But if not, be prepared for further deterioration in a weakening bull market. By BILL GUNDERSON