As Wall Street continues to tumble this week, one team of analysts argues that the market should not fall into bear territory, defined as a stock or index falling at least 20% from a one-year high, despite its own computer program indicating the opposite. (See also: Why The Stock Market Exodus Has Only Begun.)

In September, Goldman Sachs built a bull/bear indicator that combines several variables in an effort to divine the risk of a market turning point. The analysts concluded that "many bull market peaks were associated with a combination of conditions based on 5 factors." These factors include growth momentum (measured by the average percentile for U.S. ISM indexes), the slope of the yield curve, core inflation, unemployment and stock valuations, as measured by the Shiller price-earnings multiple

While the bank's bull/bear indicator is resting above 70%, a level “normally associated with high risk for equity investors," Goldman analysts issued a note Tuesday telling investors not to worry as the market is missing key fundamentals in order for a proper bear market to develop. 

Recession Unlikely, Analysts Suggest

The bank indicated that the low unemployment rate, alongside strong economic growth momentum, has skewed the results, rather than rising rates or strong core inflation. "Current very low levels of unemployment and strong growth momentum would normally be associated with other risks—in particular tighter monetary policy, a flatter yield curve and rising core inflation. But these remain subdued and without these risks rising, the prospect of a recession and 'cyclical' bear market is low," wrote the analysts. 

Due to lack of inflation, "some of these variables can appear stretched without ringing alarm bells for equity investors," wrote the strategists, who indicated that it is highly unlikely for policy rates to rise sufficiently, thus inverting yield curves or forcing a recession, without a rise in core inflation. 

The U.S. unemployment rate, at its lowest level in nearly two decades, rests at about 4.1%, according to CNBC. Meanwhile, the core PCE index, the Federal Reserve's preferred measure of inflation, is below the central bank's 2% target. "It is the fear of recession and falling profits that is the normal trigger of 'cyclical' bear markets which nearly always have their roots in tighter monetary policy," wrote the analysts. (See also: JPM Warns Customers Against Tech Stocks.)