As expected, the Federal Open Market Committee (FOMC) elected on Wednesday to raise the target range for the federal funds rate to 0.25%-0.50% from a previous range of 0%-0.25%. The market reacted initially by making wide swings in both directions before ultimately finishing near the high end of its daily range.

However, my indicators are giving neutral to bearish readings — a slight upgrade from last week’s bearish readings. So, despite the rally over the last week, my indicators have not changed much. Personally, my outlook is pretty neutral at the moment, although that could change as the market fully digests the FOMC news.

Furthermore, the risk of another recession for the U.S. economy is still a valid concern. Tax receipts are now equivalent to 18% of gross domestic product (GDP), which usually signals that a recession is near. While others say there’s only a 20% chance that the economy will fall into recession, my indicators suggest that the chances could be as high as 70%.

As the Fed winds down its balance sheet, my main concern about the rate hike is that it will dramatically increase the interest payments on the national debt. If the Fed increases rates by a total of 1%, which is what Fed Chair Janet Yellen said it plans to do over the next year, payments on the debt would balloon to an amount greater than the entire national defense budget. This is a scary situation, in my opinion, as the national debt is now greater than $19 trillion.

However, I believe the rate hike presents issues for certain areas of the market as well, including the bond market. In particular, the high-yield bond market (also known as the junk-bond market) is signaling real trouble ahead. We’re starting to see signs of that already, as two funds that focused on junk bonds, Third Avenue Capital Management and Lucidus Capital Partners, recently closed.

With the lack of liquidity in the high-yield market, Third Avenue was granted “exemptive relief” from the Securities and Exchange Commission (SEC), which allows the firm to slowly sell off assets rather than unload them at fire-sale prices, while simultaneously blocking investors from withdrawing funds held by the firm. To me, this sounds like an acknowledgement by the SEC that there is a serious liquidity problem in the junk-bond market.

We are also dealing with a deflationary market in which commodities continue to lose their value. With energy prices at multi-year lows, many U.S. energy firms that have struggled all year are now in real danger of defaulting. With many oil-producing nations in economic trouble as well, they’ll likely continue to pump more oil into the market to stay in survival mode. That does not bode well for domestic energy companies.

As for our own financial survival, we should maintain a portfolio balanced between bullish and bearish opportunities as we wait for some short-term bullishness to return to the market.

If you elected to get into the Ryder System (R) puts I gave you earlier in the month, I hope you took profits when R stock and the option both hit my targets. Let’s focus on a call option this week in Delta Airlines (DAL) as holiday travel ramps up.

Buy the DAL Feb 55 Calls at $1.40 or lower.

After entry, take profits if DAL stock price hits $55.70 or the option price hits $3.50. Exit if the stock price closes below $48.70.

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