Stock prices have rallied sharply over the past two weeks, after the Federal Reserve reduced its target Fed Funds rate by 75 basis points on Jan. 22 and by another 50 basis points on Jan. 30.

However, my indicators strongly suggest that stocks will continue to trend lower over the next six months. In fact, my models indicate that the U.S. equity markets have now entered a bear market and that stock prices are headed significantly lower during the months ahead.

I therefore urge you to ignore the recent advances in the major stock market indices, as my research indicates that those advances are nothing more than bear market rallies.

Although the Dow Jones Industrial Average has risen 772 points (or 6.4 percent) since falling to its lowest level in more than 15 months on Jan. 22, all of the major U.S. stock market indices have merely rallied back to their respective overhead price-resistance areas and are currently trading significantly below their long-term (200-day) moving averages.

In addition, short-term momentum oscillators strongly indicate that stock prices in general have risen to overbought levels and are now ready to turn lower once again.

In regards to the latest economic developments, the U.S. Department of Labor announced yesterday morning that non-farm payrolls fell during January for the first time since August 2003.

This follows an announcement from the U.S. Department of Commerce on Thursday that revealed that the growth in aggregate consumer incomes slowed for the fourth month in a row during December and that consumer spending also continued to slow.

Earlier in the week, the Commerce Department reported that sales of new homes during December fell to their lowest level since February 1995. Meanwhile, sales of existing homes fell to their lowest level since the National Association of Realtors began collecting data on existing home sales in 1999.

Consumer debt levels are near historic highs and home values continue to decline. I expect consumers to continue to rein in their spending during the months ahead. In light of the fact that consumer spending accounts for approximately 70 percent of the output of goods and services in the U.S., I expect the U.S. economy to continue expanding at an anemic rate, at best, during the coming months.

So, I strongly urge you to not get caught up into the current stock market hoopla by thinking that the bad news is already behind us and that stock prices will continue to rebound during the coming weeks.