"The rally in the major stock market indexes has been the late stages of a bear market rally," said technical specialist Steven Hochberg earlier this week. He forecast that the Dow's push above 11,000 had created several multi-year extremes in investor pessimism.

Based on this outlook, the editor of The Elliott Wave Financial Forecasts stated, "Historically, such conditions accompany market highs. Don't believe the pundits who say the Greek debt crisis will not spread beyond its borders." Below, we offer his long-term assessment for a continued bear market.

Steve Hochberg believes the market is now in the process of forming a major long-term top. Here is his bearish outlook from the Elliott Wave Financial Forecast.

"Last January, we forecast that 2007 would be the year of the 'financial flameout'. And while the financial sector is down sharply, we believe this is still just the downpayment on the sector's full decline, which will last at least the next few years.

"From 1980 to 1999, we saw a simulataneous rise in the Dow in terms of dollars (nominal), gold (real) and commodities (purchasing power). This advance signified real gains for investors. The market's topping process started in late 1999 when the Dow peaked in terms of real money and purchasing power.

The Dow's rise since 2002, however, occurred only in dollar terms. The Dow's new nominal high does not represent an increase in purchasing power nor a rise in real money. In fact, it is just the opposite, as the Dow denominated in denominated in each of these assets classes has been crashing.

Known for their bearish outlook and their forecast for deflation, co-editors Pete Kendall and Steve Hochberg in The Elliott Wave Financial Forecast suggest, "Throughout the first half of the year, we have observed the succession of credit events setting up the greatest credit crisis in history,"

The advisors notes, "A wellspring of credit drives every bubble. The beginning of the end for the credit boom occurs upon a tightening of credit. An intensifying thirst for cash will dry up the well of credit that fed the global markes over the last few years. As it dries up, the seemingly endless succession of market manias will end, also."

The expansion of credit, they contend, lifted virtually all asset prices, and, they say, its contraction will now guide them lower, much to the dismay of those seeking refuge in supposed safe havens.

Meanwhile, Hochberg and Kendall add, "The big news in the bond market is the credit spread explosion, which remains the bedrock of our bond forecast. The steep widening that occurred in July should be the beginning of a historic move. When it ends, junk bonds will have disappeared from the investment landscape."