Looking back just a few weeks, the markets ushered in the new year with euphoria. Within a few short weeks, things have turned sour. The Dow dropped below the 10,000 mark last week. S&P 500 is down 7.3% from its 15-month closing peak.

Now the question facing investors and traders is whether the market is in a corrective phase. Eric Kuby of NorthStar Investment Management Group thinks so. "I'm in the camp that believes that we are in a correction," he said.

This morning the big news of the day was the drubbing of European stock markets as fear spread throughout the region. Fear was generated by concern that some European countries could default on their sovereign debt. Among them are Greece, Spain, and Portugal.

Greece's budget gap is 12.7% of GDP Greece has to slash spending and may need IMF assistance.

Investors sold investment deemed risky such as commodities, gold and stocks and moved their money into bonds. This started a selling frenzy in commodities with oil falling $3.14 per barrel to $73.14 per barrel. Brent crude fell $3.79 per barrel to $72.13 per barrel.

It started with Dubai. Then it spread to Greece, Now its moving to Spain and Portugal. What is it? It's fear that some European countries will default on their sovereign debt.

The Europe Markit Sovx index, which measures the cost of insuring against default, jumped 100 basis points for the first time, along with heavy buying of credit default swaps (CDS). CDS spreads on Portugal hit record highs, up 17 basis points to 212. Greek swaps rose 7 basis points to 398.

January is the time for predictions. The stock market is a favorite arena. Stock analyst Michael Browne of Sofaer Global Research has changed his stance on the U.S. stock market. Bank in March 2009, he accurately predicted the start of a bull move in stocks.

Now, however, he says the bull move is over and is recommending that investors take profits. When asked if he was bearish, he said: "Am I bearish? no, but I am no longer a bull."

Is the world running on stimulus money or is there real demand for basic commodities?

What has been happening is that underdeveloped countries have been using stimulus money to stockpile raw commodities. Now there is a surplus. This, in turn, has led to a fall-off in commodity prices.

Home prices fell yet again in November, losing 0.2% month-over-month (on a not seasonally adjusted basis), following a 0.1% drop in October. The Standard & Poor's/Case-Shiller's home price index reported only five out of 20 metro areas with gains, and from November 2008 to November 2009, home prices are off 5.3%. Need a benchmark? It's late 2003: Six years of appreciation have been obliterated by the financial crisis.

The slide worries analysts who wonder if the housing recovery is strong enough to keep moving forward. A stall on the housing side, of course, could push through the rest of the economy, ultimately putting the squeeze on consumer spending (further) and impeding overall growth.

Those of you who follow Laszio Birinyi know that he uses an unusual approach to stock market predictions. One of his research tools is following the money flow in and out of stocks.

In 2007 he predicted that recovery in banks would fizzle as bad loans would lower revenue and reduce earnings. At the depth of the market's sell off last year, he predicted a rebound in stocks based on the excess money flow created by the near zero interest rates. He predicted then we were in the early stages of a new bull market.

Foreclosure filings spiked in December. The 14% increase from the previous month made the first monthly increase since July -- and a hell of a severe way to break the streak. The double-digit increase, reported by RealtyTrac, brought the number of foreclosures to 349,519 in December. In addition to the increase from November, the result is a year-over-year increase of 15% from December 2008. In 2009, 2.8 million foreclosures were filed, up 21% from 2008 and 120% from 2007.

Foreclosure activity reached a monthly high of 361,000 in July, but loan modifications, state legislation extending the foreclosure process and the volume of homes in the foreclosure pipeline had resulted in a gradual decline from that point. From the third quarter to the fourth, foreclosures fell 7%, though the rate was still up 18% from the fourth quarter of 2008. California posted a 17% decline in foreclosures quarter-over-quarter, though it increased 9% from November to December.

China wants to join the international trading club. Regulators approved "in principle" the trading tools of stock index futures, short selling and margin trading. These trading practices have long been used in London, New York and most international trading exchanges.

It will take about three months for the new changes to take effect. Meanwhile,stocks of major Chinese brokerage houses were bid higher in anticipation that they will be making margin loans to investors.

We're all pretty happy to put 2009 behind us, especially those who submitted the 1.4 million bankruptcy petitions last year, making it the seventh-worst on record.

Data gathered by the Associated Press from the 90 bankruptcy districts in the U.S. shows that filings surged 32% from 2008, with 116,000 bankruptcies in December alone. The 22% jump last month, though substantial, was at least below the annual average. That said, the holiday season may have chewed up time that people would use to file, so the apparent reprieve (if you can call a 22% increase in bankruptcies a reprieve) may not be real.

A new year is upon us and like the beginnings of any year, and even more so, a decade, the predictions are flying fast and furious.

The start of 2010 is bringing out every analyst, talking head, business journalist, periodical and newsletter propagator, sportscaster, palm reader, taro card interpreter, astrologist, medium and madam making predictions to garner attention, entertain and even profit. Apologies to anyone I left out.

If you like technical analysis, here's one of the granddaddies for predicting stock prices. It uses Fibonacci numbers.

You probably are wondering where the word Fibonacci came from. Fibonacci, also know as Leonardo of Pisa, was an Italian mathematician who lived in the 1200s. He worked out a simple progression of numbers starting with 1 and adding the previous number to get the next number. The Fibonacci numbers are 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and so on.

Over generations, one truism of the U.S. housing market has been that mid-level home prices recover first, prior to the luxury market or upscale homes.

And the logic implied in the above is obvious enough: there are more Americans in the middle-income market, hence there's a wider pool of eligible buyers, once these prospective buyers sense the time is right to purchase. The luxury market, because its drawing pool is so small, and niche-oriented, historically recovered later.

Who is Mary Ann Bartels? Bartels ranked second among technical analysts in Institutional Investor magazine's 2009 survey.

Bartels is a "technical analyst," which means that she uses price charts to forecast resistance levels, or ceilings that are restricting further price increases, and support levels, or floors limiting declines. A drop below support is a harbinger of losses.

One tool that Bartels uses is the 50 day moving average. On December 4, the US dollar index rose above its 50 day moving average to 75.911. When this happened it turned the dynamic of the market upward. Bartels is now saying that the dollar is bottoming.

You are probably wondering, is there an index that measures consumer optimism and pessimism? The answer is yes. It is the Investor's Business Daily and TechnoMetrica Market Intelligence or IBD/TIPP.Their Optimism Index slipped to 46.8 in December, from 47.9 in November. Readings above 50 indicate optimism, while those below 50 indicated pessimism.

The index is now 3.2 points below its 12 month average of 48 and 2.4 points above its reading of 44.4 in December 2007, when the recession began.