Let’s stipulate right up front that I’m bullish on the market: I still think we have some upside left in 2012.

But, any good trader should also look at the worst case, and there the situation could get pretty bad.  Simply put, the Dow has a long way to go to sink back to its long term uptrend line.

I think it’s unlikely that will happen, but I wanted to prepare you for all eventualities.

On a brighter note, check out the action in Netflix (NFLX).  There’s a stock that’s had a good run lately, and is close to buying territory.

One stock not in buying territory, though, is McDonald’s (MCD).  I own this one, and may buy more.  But, not until it drops maybe another 5%.  I urge you to stay on the sidelines for awhile too.

Gary B. Smith joined FOX News Channel in 1999 and is currently a regular commentator on "Bulls & Bears," including his own segment called, "The Chartman."