CNBC, for example, reports that “Monday's broad-based sell-off pushed stocks below important technical levels, signaling more pain ahead for the market.”

Tactical traders with a short-term horizons may find reason to be anxious these days, but investors with a relatively longer outlook might wonder if a genuine regime shift has arrived for equities. One way to answer that question is with a quantitative process that looks at market history through the lens of a Hidden Markov model (HMM). For some background, see these posts here and here. The short explanation for HMM is that this econometric filter analyzes market history for statistical guidance on estimating if a regime shift has taken place. In other words, are we in a bear market?