There is overwhelming evidence now that the bear market in US equity markets is both real and with us. Last August I postulated that the bear market was indeed upon us. I'll use that post as a template for an update now.

Let me say first that these next few weeks are do or die for the markets both technically and fundamentally with a tremendous amount of economic data, important speeches by Fed members, and with the bulk of 4th quarter earnings looming over the next three to four weeks. To start the year, the markets have shed almost all of last years gains in the first three sessions of the year and are poised to give up even more in the coming days and weeks.

After watching this market last week, I'm afraid to say it but there still seems to be little or no fear in this market. It's as if the majority of the investors feel as if the market owes them something and will not take a dump on their portfolio. Let me be clear, the market owes you nothing and unless you manage the risk in your trading, you will end up with sub-par returns or worse;  losses!

The cross currents in the markets are a mix of hope and fear now; hope that the central banks around the world can and will lower interest rates and avoid a recession; fear that they won't or can't! I read a lot of commentators and pundits and I see everything from the postulation that we are in a deflationary environment (except oil and commodities) to which I say oh yeah?; while others suggest inflation is raging to which I say; just wait! 

With that said, let's look at the key components that portray the market's future including the charts.