More Reasons for a market drop in the next 3-4 months.

From The Minutes of the Federal Open Market Committee:

The information reviewed at the June meeting indicated that economic
activity had remained soft in recent months.

Manufacturing activity had deteriorated.

Business investment in equipment appeared to have moved down.

Residential construction had continued its steep descent.

Labor demand continued to weaken in April and May.

Industrial production contracted in April and May at a slightly faster pace than in the first quarter.

Retail purchases of motor vehicles fell to a low level.

More broadly, households' financial conditions appeared to have
weakened in recent months.

Activity in the housing sector remained very weak in April and May.

Real spending on equipment and software appeared to move down a bit
further in April and May

Business outlays on transportation equipment continued to fall
sharply.

The U.S. international trade deficit widened in April, as a jump in
imports outweighed a rise in exports.

Recent data pointed to broad softness across the advanced foreign
economies in the second quarter, consistent with a weakening of
consumer and business confidence.

Headline consumer price inflation in the United States remained
elevated in April and May.

Business spending was expected to remain sluggish, as tight credit
conditions, uncertainty about economic growth, and the rising costs of
inputs--especially energy and raw materials--appeared to be making
firms quite cautious and inclined to defer capital expenditures.

Participants were concerned about the inflationary consequences of
recent increases in the prices of energy, food, and imports, and they
expected headline inflation to rise in the very near term.

Many financial institutions continued to experience significant credit
losses and balance sheet pressures.

Credit availability was likely to remain constrained for some time.
Labor markets have softened further and financial markets remain under
considerable stress.

Tight credit conditions, the ongoing housing contraction, and the rise
in energy prices are likely to weigh on economic growth over the next
few quarters.

It was agreed that the next meeting of the Committee would be held on
Tuesday, August 5, 2008