Major public companies are lowering their 2007 earnings forecasts, but stock price valuations remain high.

Oil prices have stopped falling and have stabilized. Hence, companies can no longer count on lower oil or gas prices to help earnings.

The U.S. dollar is in a free fall as reflected in the rising value of the euro. Gold has been rising for a reason. If the U.S. dollar starts to spiral downwards in value against other world currencies, the Fed may decide to keep rates at their current level or even raise them.

The U.S. housing market looks more like a crash than a hard landing. Toll Brothers says it doesn’t see any turnaround ahead... with orders for its new homes down 58% in the third quarter. (My e-mail is full of “just reduced for quick sale” messages from realtors.)

Government and public debt is near record highs. Consumers are spending less, as evidenced by recent reports from retail giant Wal-Mart.

The Fed is still concerned with inflation and it seems clueless to the threat of deflation developing. Interest in the U.S. rose too quickly for consumers to digest.

Most economic reports now point to a slowing U.S. economy, something we haven’t seen in years.

Based on the seven warnings I’ve listed above, it’s my belief the stock market is in trouble... the bear market is just doing its thing hoping investors continue coming into stocks and ridiculously high valuations at a time the big U.S. economy is slowing.

The Dow Jones Industrial Average, the S&P 100 and the S&P 500 could all be in mini-crash mode. If it were not for the huge amount of liquidity in the system, stock prices would be much lower today than they presently are.