NEW YORK ( TheStreet) -- The easiest explanation of recent market action boils down to this: There's simply no reason to rally.

Sentiment has gotten so bad that even a better than expected read on weekly initial jobless was talked down by economists and traders alike, rather than lauded as a reason to dive into stocks, which have been deteriorating for nearly a week now. Instead, bonds drew buyers, sending the yield on the 10-year Treasury back below 1.5%.

That QE3 is off the table unless macro conditions get much worse hasn't quite qualified as a tipping point in terms of setting off a major wave of selling but it does seem to have left bulls a bit dumbfounded. After May's ugly swoon, the major U.S. equity averages came back a bit, at least partly on the idea that softening economic data would force the Fed's hand.

Wednesday's release of the minutes of the central bank's latest policy meeting seems to have deflated that notion and with second-quarter earnings season widely believed to be no great shakes, the cupboard is bare when it comes to positive catalysts.

Capital Economics, for one, thinks the selling make sense.

"The weakness in the prices of equities and commodities on Thursday appeared in part to reflect disappointment that the minutes of the June FOMC meeting failed to signal an early launch of QE3 by the US Fed," wrote analyst Julian Jessop. "This interpretation is consistent too with the strength of the dollar both against the euro and gold."

He continued: "As it happens, our view is that the minutes did reveal a growing willingness to consider additional monetary stimulus. But as this support would depend on economic and financial conditions deteriorating further, the markets are surely right not to see this prospect as unambiguously positive."

As for Friday's scheduled news, earnings season is about to get its first whale sighting!

That's right, JPMorgan Chase ( JPM) is finally going to report its second-quarter results, an event that's expected to force CEO Jamie Dimon to get all granular about the whole "London Whale" trading debacle.

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