'The' Bear Market - was not launched in the last two days; a trap-door doesn't lie-in-wait for investors; and there also isn't a bullish longer-term prospect, yet. 

We have repeatedly argued that history will record market internals, and a likely Recession as well (or a slip-back within the 'Controlled Depression' as I'm prone to refer to everything since the projected 2007-'08 'Epic Debacle reversal of years of bullishness from the 2002 lows (we had called for a crash in 2000; a preceding point of bearishness after a quarter-century of optimism overall). 

In that respect yes, there is a 'vacuum' technically underlying this market, but it should not be a 'trap-door' except for the Johnny-come-lately's and managers who tried to 'force' the market to move higher repeatedly (and rack-up losses in the process); or those who must be fully invested all the time, so thus rotated in chaotic fashion for months, particularly as the Dollar pressed margins for many US companies who derive significant revenue proportions from sales abroad.

This weekend's (briefer text some days during the holidays) remarks are clearly centered on recognizing this set-up in the wake of the FOMC rate hike as we'd suspected; ideally rallying on the hike (after brief but wild trench-warfare) and in response to foreign currencies slipping, with the Dollar up (before pulling back a bit, but still focused on sightly higher levels in time) and Oil lower, giving hints more of deflation than of inflation, much less recovery with traction, the Fed 'pretends' is ongoing. The Fed says they did this because they're early. Market action before and after says they were late, or perhaps incredibly early. But we knew that too; expecting they were in a corner (no good outcome regardless); a corner that really required they lift rates for macro, not domestic, reasons. 

It's of course important to note that the Fed move did 'not' change economic or global attitudes. Competitive devaluations persist; the sluggish consumer plans remain; the terror threat is actually amplified (sadly, and we know why DC has these vague comments about 'nothing specific', because there are efforts by a slew of barbarians to disrupt the holidays; some known that you'll never hear of and others hopefully disrupted... examples are suggested by remarks this week by the heads of Homeland Security, the FBI and even the Pentagon... contrary on the surface to the President saying nothing specific going on). I hope he is right; just pointing it out. Also 'The New York Times' omitted a couple sentences of an online article about the President saying he wasn't ware of the anxiety of Americans after Paris and San Bernardino because he hadn't watched enough TV. If I didn't see that in the most liberal paper online, I'd not believe it. (By the time it reached print editions, it was deleted and supportive remarks inserted.) 

Bottom-line: we hold short; March S&P / E-mini from 2055; mental stop lower at 2025 for half the position into early Monday. While we had a fabulous Friday and for that matter Thursday, we pointed-out the triggering aspects, and allow for a respite after a bit of a washout.

Daily action - to see why we're a bit tentative on the new week, one has to be aware that part of the 'liquidation' projected for Friday (early and again later) is related to the Expiration, and that incredible breakdown below lower strike level positions rumored (and shared) for a couple weeks. 

That may have a lot of compelled ownership positions now that can either be retained, or more likely liquidated, by the new shareholders. Hence we're open to a washout Monday, followed by a bounce; then perhaps further liquidations from redemptions or margin call pressure.

After that, we 'might' get a relief rally rebound; but nothing likely to gain serious traction with respect to the upside. Even if it carried until one could sell for trades settling in the new year, that would be from lower levels to lower rebound peaks basically as I've suggested for a couple weeks, in-anticipation of a decline prior to any bounce-back of substance. 

Then we can talk about running into a brick wall of resistance (that's the best upside case I can envision for now). The best downside case is a flat-out crash as everyone who failed to realize this was distribution all year, and crested with a narrow universe of stocks leading the rebounds into early-mid July (or lesser desperate efforts that followed) is now compelled to run for cover, belatedly. 

The downside prospects are open-ended really; so besides saying the 1900's all through the past two weeks; we can talk of the 1800's, and you don't want to hear real bearish prospects; many of which are contingent on variables beyond what can reasonably be assessed just now, but they are out there. We'll look of course for signs of an ultimate bottom; but that's way off in the future. 

For now we're short for traders from March S&P / E-mini 2055 (or surrogates as we don't give traders just guidelines we hope are helpful to your strategies), and have a 2025 fixed 'mental' stop for half the position in-general for Monday, prior to our first comment for traders.

For investors or a more macro-sort of trader, it's been great to avoid being in the market much in the past year, and if one had bearish positions that's super; simply avoiding the carnage in the rotational bear market that's been ongoing would do; while using rallies all year to build-cash, lightening-up, so you're more excited about future bargain prices than worried terribly about erosion in already-held positions. However it is not yet time to be shopping, and while we don't pick stocks generally in these days, we have mentioned a couple, and mentioned sectors being killed that just might have some rebound after tax-selling pressures subside. 

Enjoy your Christmas week, and I'll be here with core comments each market day; a bit briefer depending on market behavior.