Mapping Out the Bear Tracks

This column was originally published on RealMoney on April 3 at 7:25 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

I believe the U.S. economy will slip into a recession over the next two years and that U.S. stocks have entered a bear market. My main reason for these predictions is stress in the banking system caused by the weak housing and real estate markets.

While fundamentals are clearly deteriorating, the technicals on the major equity averages are showing some negative divergences. However, they're not yet weak enough to confirm the bear market based on pure technical analysis.

Complacency vs. Wishful Thinking

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