Stock prices are down from their January 26 highs, and the S&P 500 Index (SPX) is headed for two consecutive monthly declines for the first time since 2016, The Wall Street Journal reports. As a result, a growing number of investors are concerned that the bull market has run its course, and that a bear market finally is underway. To the contrary, Bank of America Merrill Lynch believes that it's too early to flee stocks right now. According to Dan Suzuki, senior U.S. equity strategist at BofA Merrill Lynch, per the Journal: "Returns at the end of bull markets are some of the strongest. If you're a conservative investor, maybe this means you should take some chips off the table. But if you're trying to capture all of those returns, then you want to wait."

All Would Not Be Lost

Since its record high at the close on January 26, the S&P 500 was down by 9.4% as of 11:30 AM New York time on March 28. The index already had a 10.2% correction that officially ended at the close on February 8. That recent low is now being tested again, but it's still dramatically short of how investors define a classic bear market.

The commonly accepted definition of a bear market requires a decline of 20% or more. A drop of 20% from its January 26 peak would place the S&P 500 at 2,298, a value last seen more than 13 months ago during intraday trading on February 9, 2017. Also, a value of 2,298 still would be 7.4% above the close on November 8, 2016, Election Day. 

Financial columnist Mark Hulbert is among those who do believe that a bear market already is underway, based on his reading of various technical indicators. Even so, he makes the same point that significant gains since the 2016 election are likely to be preserved, and that new highs are likely to achieved, based on history. (For more, see also: Why the Stock Market Is Poised for a Major Breakdown.)

The Merrill Lynch Analysis

As described by the Journal, BofA Merrill Lynch has a pulled together a list of 19 economic and financial indicators that, they find, historically signal an upcoming bear market when 80% of them, or at least 15, are tripped. Right now, 13 are pointing toward a bear market. However, per a March 13 report from BofA Merrill Lynch cited by the Journal, getting negative signals from 13 of the indicators suggests that the onset of a bear market is about two years down the road, based on analysis of the last seven bear markets. Hence Dan Suzuki's recommendation, quoted above, that it's too early to bail out on stocks just yet.

Among the indicators that now point to a bear market are, per the Journal, rising interest rates, increasing consumer confidence, tightening credit, and increasing market volatility. However, the Journal adds, a few other indicators are getting close to bearish territory, including the flattening of the yield curve. Meanwhile, Suzuki notes that several commonly-used indicators of market tops, including stock valuations and investor sentiment surveys, are unreliable, the Journal adds.

Goldman Model Turns Bearish

Meanwhile, the Bull/Bear Indicator developed by Goldman Sachs Group Inc. is sending a very strong bear market signal right now, CNBC reports. At a level above 70%, this barometer is now in a range "normally associated with high risks for equity investors," per a Goldman research note quoted by CNBC. Goldman's analysis looks at five factors, per CNBC: U.S. economic growth momentum, as measured by Institute for Supply Management (ISM) manufacturing indexes; the slope of the yield curve; core inflation; unemployment; and stock valuations as measured by the CAPE ratio.

However, strategists at Goldman are ignoring the model. As quoted by CNBC, these strategists write: "It is because of the lack of inflation that some of these variables can appear stretched without ringing alarm bells for investors. Put another way, it is very unlikely that without core inflation rising much, policy rates will rise sufficiently in the U.S. or elsewhere to invert yield curves and/or force a recession in the near future." In fact, many bullish analysts and investors point to a long list of factors that will keep stocks rising, including robust global economic growth and surging corporate profits.