Let me tell you: things aren't pretty in the stock market. The DOW continues to trade precariously around key technical support/resistance at 10,600. On Tuesday, we saw another decline below 10,500, as worries about oil, interest rates, and the Q3 continued dragging on investors.

 Oil prices continue to trade at high levels, and I expect they could stay at the $60.00-plus range for the foreseeable future. Even OPEC is saying that its commitment to increase the daily supply of oil by two million barrels failed to have any major impact on oil prices, which surged over $4.00 a barrel on Monday. The reality is that investors are quite edgy in 2005, and they're hesitant to even hold stocks at this time.

 The Federal Reserve also added some drama to the market after increasing the Fed Funds rate by another 25 basis points to 3.75% on Monday, representing its 11th straight 25-basis-point increase since June 2004. The Fed also reaffirmed its current bias to increase rates going forward at a measured pace. Let's face it, rates will continue to rise.

 If you're not yet concerned, you should be. Americans will see higher financing costs eat into their disposable income. The United States is already at the top as far as debt per capita goes. Now, given the higher financing costs, it may prove even more difficult to pay bills. This could translate into less spending and an impact on economic growth.

 Another area of concern for Americans continues to be the hot real estate market, which some argue is on the brink of a collapse. My view is different. While I am concerned about the high real estate prices in many regions of the United States, I believe interest rates are still relatively low. I would begin to worry about the housing market if rates begin to rise in a more aggressive manner. So far, the Fed has suggested it does not want to increase rates aggressively, fearing it would trigger a meltdown in the stock market and economy.

 Regardless, the risk in the market is quite high. Consider this before venturing into any new position.