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Today's environment is almost unheard of as far as the level of uncertainty regarding the state of the current economic state and the state of the major U.S. stock market indices. Because there are so many different viewpoints on where we will go from here, I wanted to do a quick mini-series of the top 5 reasons the market will go in either direction. Today I will present the top 5 reasons the market has plenty of downside ahead. Tomorrow I will look at the top 5 reasons a market recovery could be ahead. At the end of the quick little mini-series it will be up to you to determine which reasons are the most valid.

Top Five Reasons the market has plenty of downside to come

1. It's the economy stupid. Quite simply, stocks cannot be expected to do well when the economy appears to be falling apart before our eyes. Stocks can fight the economy over the short run, but in the long run they always follow the lead of the economic situation.
2. Uncertainty- I said it in the introduction to this mini-series and it bears repeating, there is more uncertainty about the market and the economy now than there has been in a long time. The market absolutely hates uncertainty more than anything else. There is no telling how long this uncertainty will last, and without a resolution in sight stocks could fall hard.
3. The jobs picture is getting worse by the month. The employment report over the last few months has shown a developing disaster in the employment market. Bulls were hoping that the jobs situation would hold up, but it appears this was not meant to be. Economies and stocks do not like to fight rising unemployment rates.
4. Inflation threats- Though inflation doesn't appear to be on the front-burner just yet, it might be before long. Crude oil prices around $110 a barrel and commodity after commodity hitting record after record will almost certainly eventually prove to be an inflation problem for the economy. If inflation occurs while the recession is going on, things could get ugly in a hurry.
5. The pressure on the consumer. The consumer has held up relatively well through the whole recession talk of the last few quarters, but they are finally beginning to crack. Record gasoline prices and food inflation are really putting a dent into spending money. The housing market is also a major drag on many people, who have had to foreclose on their homes.

These are just the top five reasons that the market has plenty of room to move to the downside. There was no shortage of things that I could have included, but this list appears to be the most likely drivers to continued selloffs in the marketplace in the months ahead.  Stay tuned for tomorrow night's list of the top five reasons the market could be in for a recovery in the months ahead.