The Dow is set to end another week with a close above 8,000. In fact, the U.S. stock market is at a crossroad of sorts.

Right now, Dow 8,000 is not an issue: 5 consecutive weekly closes and roughly 400 points above 8,000 suggest that battle has been won by bulls.

Still, the bears will argue that the Dow is not that far above the psychologically-important 8,000 level and that this market is more than capable of wiping out that cushion in two sessions. Further, the bears also argue that while the Dow has closed above 8,000 for about a month, it hasn't been able to both make and sustain new highs above 8,600, then 8,800 and 9,000 etc.

With Circuit City Stores, Inc. (NYSE: CC) flailing in the wind for the last two quarters, the company's shares are sitting in prime takeover territory. Best Buy, Inc. (NYSE: BBY) is not letting up on its death grip yet, and continues to out-sell and out-perform rival Circuit City at every turn. As I mused a few weeks ago, CEO Phil Schoonover may as well put his resume up for a peek. Well, if anyone wants to look at hiring him, anyway.

But, downtrodden times usually bring out the shorters, and of course this is the case with those shorting Circuit City shares right now. Shares in the consumer electronics retailer are already sitting in cherry-picking territory, closing yesterday at under $10 each. Do they have room to go even lower? Based on recent results and the guidance being given for a possibly poor-performing holiday retail season, Circuit City shares may head south even further.

Is it time to get in now? Only if you're into shorting -- or believing that a private equity buyout may soon happen to the retailer (a rumor for quarters now). Shares are sitting at a four-year low as of this week, and the opportunity vultures may be swooping in for several reasons. It's an opportunity with risk, but isn't everything? Almost 33 million shares were held short in September of this year, which comprises 19% of outstanding public shares. What does that tell you? To me, everything.

Yesterday, Robert Shiller of MacroMarkets said "the pullback in the US residential real estate market is showing no signs of slowing down." This followed the S&P/Case-Shiller national home price index falling 0.9% sequentially in the second quarter.

The index is down 3.2% from the second quarter of last year and is at its lowest level since it began in 1987. Robert Shiller went on to say he is worried about your home's value, and that's not good.

As a reminder, Shiller, of Yale professorial claim, correctly called the excesses of the late 1990's stock market. However, while he called the top, he never called the bottom, staying with his bearish bias way too long and never becoming a buyer.

Shiller shifted his focus to real estate in the current decade. Once again, his bearish prognostications proved correct. However, as the real estate market becomes weaker and weaker with the media flocking to his doors, the trained economist appears to be focused on following the downward trend and not attempting to find a point to start bottom fishing.

A new contrarian indicator may be when Shiller hits the airwaves in full force with his bearish views, it could prove to be a good sign that the bottom for the bear market in real estate is near.

MOST NOTEWORTHY: Continental Airlines, Inc (CAL), Molson Coors Brewing Co (TAP), Watsco, Inc (WSO), K-V Pharmaceutical Co (KV.A), Progressive Corp (PGR) and Color Kinetics (CLRK) were today's noteworthy downgrades:

• Goldman downgraded shares of Continental Airlines, Inc (NYSE: CAL) to Neutral from Buy on valuation, higher oil prices and a weak domestic market.

• Goldman also downgraded Molson Coors Brewing Co (NYSE: TAP) to Neutral from Buy based on the increase in analyst estimates, valuation and the potential for margin pressure in the summer.

• BB&T cut Watsco, Inc (NYSE: WSO) to Hold from Buy based on valuation and catalysts that are already reflected in the share price.

• Roth Capital downgraded shares of K-V Pharmaceutical Co (NYSE: KV.A) to Hold from Buy, telling clients they have learned that Par Pharmaceuticals Cos (PRX) has launched generics of 50, 100 and 200mg Toprol-XL. The firm expects a material impact to KV's 100 and 200mg strength generics.

• Stifel expects investor enthusiasm regarding Progressive's Corp (NYSE: PGR) recapitalization plan to fade as underwriting fundamentals deteriorate and cut shares to Sell from Hold.

• Color Kinetics (NASDAQ: CLRK) was downgraded to Hold from Sell at Needham on valuation...

OTHER DOWNGRADES:

• Citigroup cut The Phoenix Co's (NYSE: PNX) to Hold from Buy.

• KeyBank downgraded Lubrizol Corp (NYSE: LZ) to Hold from Buy.

• Goldcorp Inc (NYSE: GG) and Freeport-McMoRan Copper & Gold Inc (NYSE: FCX) were downgraded to Market Perform from Outperform at BMO Capital.

• Susquehanna downgraded Build-A-Bear Workshop, Inc (NYSE: BBW) to Neutral from Positive.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

A few BloggingStocks readers know that I've hinted about my opinion that a bear market is impending. Well, okay, I didn't just hint about it, I put it in bold print and slapped a picture of a bear on it. Needless to say, I have received strong reaction from both mindsets on the subject. I maintain my stance with the bears and the short sellers.

I have not witnessed an American economy such as we're entertaining now since the early 1970s. I didn't pay too much attention then but I was aware enough to understand what was going down. The biggest contrasts I see between what we went through in that economic train-wreck of the 70s and what we have now is that back then they seemed to have little idea of how to curtail inflation, and the lower to middle income brackets still had paychecks that were rising. These days it seems that inflation is a dragon that can be reasonably controlled, but the lower to middle income brackets have pay scales that are wilting in many regions.

Riddle: How is Jim Cramer like Daniel Boone?

Answer: They are both required to wrestle a bear now and then ...(pronounced, rassle a bar).

I'm going on record right now. It is my opinion that the bear is stalking Wall Street. A big, nasty, ugly, smelly, sluggish old bear is lurking around the corner, and he's going to park his fat, furry butt right on the DJIA. I don't like it any more than you do, but as I've said before, I can't help but see what I see. I see very few bright glossy gadgets slated for release in the electronics/technology sector. I see retail sales flagging. I see hopeless attempts to prop up crude oil prices. I see home sales and construction in a blue funk. I see satellite communications saturated along with their associated markets. I see banks raising their service fees to augment flat-lined profits. I see managerial bloat. I see speculators scurrying to and fro trying to grasp a slice of any 6% or better spike. I see a Democratic Congress damning the consumer by trying to place an increased capital drag on energy producers, (yeah, tax the oil companies ... that'll help the little guy, you idiots). I think it's time to button up and hunker down with some of your hard-earned profits. I think it's time to lock into some value positions that portion of capital that you don't consider to be a gambler's share of your wealth.

Is there a bear market coming? I do most assuredly think so. I select a quote from Jim Cramer: "If you're in the market, you have to know there's going to be declines. And they're going to cap, and every couple of years you're going to get a 10 percent correction ... They're gonna happen. When they're gonna start, no one knows. If you're not ready for that, you shouldn't be in the stock market."

It took nearly seven years, but during the trading day on Sept. 28, the Dow Jones industrial average briefly reached a new high of 11,725, surpassing the prior peak close of 11,723 set on Jan. 23, 2000.

Remember those days? That was during the height of the dot-com boom, when the economy was speeding ahead and technology shares were all the rage. My brother-in-law was holding CMGI, hoping for "one more double" and I was begging him to sell half and buy oil stocks instead (if only you'd listened, Bob!). I was very pregnant with my first child -- now a first grader. Time does fly.

Stocks fell for three painful years, first as the dot-com bubble burst, then Sept. 11 terrorist attacks pounded the economy, and finally, as corporate scandals like Enron and Worldcom gripped the nation. The Dow hit a low of 7,286 on Oct. 9, 2002. (a 38% decline from high).

Then, surprise, surprise, 2003 was a boom year for equities. But after that, the charts look kind of flat and bumpy on the road to Dow 11,000. I remember wondering in 2004 and 2005, would we ever get past that level? And this year, could we stay above it? Since August, however, stocks have had a very nice run up to today's close of 11,718.

What is fueling the stock buying now, my colleague Sarah Gilbert asked recently. It's certainly not obvious.

After all, the economy is slowing. The latest reading on gross domestic product came in even lower than thought. Today the Commerce Dept reported 2.6% growth in April-June, when 2.9% growth was reported as a preliminary figure a month ago. Growth in the first quarter was 5.6%.