The bull market is on track to celebrate — barely — its seventh birthday next month. But many strategists and money managers believe that this old bull won't see a cake with eight candles because it's already rolling over into a vicious bear market.

We won't know for sure if that's the case until the S&P 500 (SPY) takes out the 1700 level and stays below there for a week or so. And there's one driver that will keep bullish investors' hopes alive even during that drop: the economic expansion hasn't rolled over yet and it's rare to have a bear market without a recession.

Who is right? It's critical that you weigh the arguments and evidence of each side because if the bears are right, it could mean another 20% decline in the S&P 500 to 1400. And if that happens, your individual stocks will lose much more on average, even if you are buying dips “on the way down.”

In this report, I will lay out the key arguments of both Bulls and Bears on 3 crucial issues to find out who you should listen to.

Earnings Recession Nightmare

This is the biggest driver of the stock market correction right now. In fact, back-to-back quarters of negative earnings “growth” were what caused me to take a big bearish stance last October, looking for a big “valuation re-set.” But the Q4 seasonal appetite for stocks ignored these facts right through the holidays.

Then the bear began the New Year with a vengeance, even before earnings season started and we found out Q4 is working on a net decline in year-over-year growth of minus 6.5%. Granted, a large part of falling earnings is related to the declines in oil and the energy sector. But, QE-driven buybacks and other financial engineering cannot stem the tide and the spillover effects are showing up as Q1 earnings estimates drop fast to -7.5% “growth.”

And now the forward outlook for Q2 has dropped into negative territory. As I've been saying, “Earnings guess-timates for the next year are in jeopardy of being cut. Investors should beware of Wall Street strategists and their guesses and price targets because the market may not be a reasonable value again until S&P 1700.”