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.

We frequently receive comments that the market is overpriced. Recently one of our active readers commented that the market P/E was 30, which it's not. The actual rate (S&P forecast) has been even higher at times due to the volatile market.

The average should trend closer to the long term P/E of 15.7 in the next few years. However, I have reviewed companies often covered on our site and come up with a list of 35 stocks that have price-to-earning ratios below the long-term average already. I think there are dozens of bargains regardless of the status of the overall market.

Berkshire Hathaway Class B (BRK.B - option chain) shares are are on the move today after Standard & Poor's announced that the stock will be added to its benchmark S&P 500 index, replacing Burlington Northern Santa Fe (BNI), which will be acquired by Berkshire. BRK.B will also be added to the S&P 100. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BRK.B, which is now possible with the recent 50:1 stock split.

BRK.B opened this morning at $73.28. So far today the stock has hit a low of $70.82 and a high of $73.28. As of 12:00, BRK.B is trading at $71.08 up $3.09 (4.5%). The chart for BRK.B looks bullish.

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.

The CBOE Market Volatility Index (VIX) is up nearly 10% this afternoon, buoyed by a down day in the U.S. equities market. Today's jump in the VIX likely comes as no surprise to option speculators, who have recently been loading up on VIX call options.

During the past five days, option traders on the Chicago Board Options Exchange (CBOE) have bought to open 177,441 calls on the VIX, compared to just 74,637 puts. In other words, about 2.38 times more calls than puts have been purchased on the so-called "fear index" during the past week.

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.

If there ever was a stock that was hiding in plain sight, it is that of Berkshire Hathaway (BRK.B) which is capitalized at a tad over $150 billion and run by "my pal Warren" and his pal Charlie. That's Warren Buffett and Charlie Munger, perhaps the most successful investors in five generations.

Berkshire Hathaway, a textile mill, was Buffett's first turn-around play. He was successful and started generating significant amounts of free cash-flow that allowed him to invest in other things. Those investments also paid off and eventually the original enterprise became the namesake of today's diversified giant holding company.

I selected BRK.B for numerous reasons and believe it will easily beat the market next year as has been it's history.

The DJIA has not moved much since mid-month and today was no exception with all three major indexes close to flat.

The Conference Board said that its Consumer Confidence Index rose to 52.9 for December, up from up from 50.6 in November. Both numbers are extremely low compared to a reading of closer to 90 in an expanding economy. The S&P/Case-Shiller index of home price rose a tiny .4% from September to October, but the most recent figure for the housing market was still down 7.3% from last year. Housing prices may be about to find a bottom, but, if so, the case for it is still shaky.

The unofficial closing bell numbers:

Dow 10,545.41 -1.67 (-0.02%)
S&P 500 1,126.19 -1.59 (-0.14%)
Nasdaq 2,288.40 -2.68 (-0.12%)

The market should have focused on the downward revision of Q3 GDP to 2.2%. When the benefits of "cash for clunkers" is taken out, the economy barely grew at all.

Stocks ended up being driven by good housing sales figures which were up 7.4% for November and equities were up for a third consecutive day. The market's movement between now and the end of the year will probably be driven by retail sales numbers, but there were few of those today.

The unofficial closing numbers:

Dow 10,464.93 +50.79 (0.49%)
S&P 500 1,118.02 +3.97 (0.36%)
Nasdaq 2,252.67 +15.01 (0.67%)

The markets were slightly up most of the day, but traders seemed to be unsurprised by big news from Dubai and Citi. Many of the "most actives" only moved up or down a percentage point or two. It was not a day in which the market showed any conviction which was surprising given the number of potential catalysts early in the day.

The numbers:

Dow 10,501.43 +29.93 (0.29%)
S&P 500 1,114.10 +7.69 (0.70%)
Nasdaq 2,212.10 +21.79 (0.99%)

After reading an unbelievable sell recommendation by one of my BloggingStocks colleagues, I didn't know whether to laugh or cry. In Thirteen Dow stocks that are doomed, we are informed that 13 of the 30 are going down and we should all bail out before it is too late.

I find this silly on many levels. For one, 13 stocks amount to a large-cap index fund and since large-cap stocks have lagged the market the probability that they will outperform going forward is real and has many investors promoting them.

Standard & Poor's is performing some end-of-year cleanup on its benchmark index, the S&P 500 Index (SPX). My colleague Mark Fightmaster reported earlier that Visa (V) is set to replace Ciena Corp. (CIEN) on the widely watched market barometer, but that's not the only SPX development hitting Wall Street today. In fact, struggling insurance issue MBIA Inc. (MBI) is preparing to take its leave from the venerable index.

In a press release late Friday, Standard & Poor's explained that MBIA "currently ranks 500th in the index and is no longer representative of the S&P 500 index market cap space." The beaten-down insurance company will be replaced by Mead Johnson Nutrition (MJN), which is in the process of being spun off by Bristol-Myers Squibb (BMY).

Investors are familiar with the concept of a "Santa Claus" rally. In his Next Inning newsletter, however, Paul McWiliams looks at a less well-known seasonal pattern involving the Chinese New Year.

"With the growth of Asian consumerism we've seen a progressive shift in holiday shopping patterns.

"While the Christmas holiday shopping season still dominates these seasonal patterns, the Chinese New Year has significantly grown in importance during the last decade.

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.

"Is a stock market correction imminent?" asks market historian, timer and money manager Jim Stack.

In his Investech Market Analyst, he answers, "Yes. But, actually, one could answer that question the same way at almost any stage of every bull market in history. Corrections are always imminent in bull markets, with the only question being how severe the next correction will be."

Here, he looks at the market's history to help forecast both the likelihood of an upcoming correction as well as the historical evidence for a "Santa Claus rally."