Although there will likely still be some turmoil in equities, a bear market is not on the horizon, says BCA Research.

“According to our Global Investment Strategy service, equities have not yet been fully washed out, but a bear market is not in sight,” BCA says in a research note.

“The current correction has further to run based on most technical indicators, which have not yet hit levels that typically indicate a selling climax,” it suggests.

“Investors will likely remain nervous in the near term due to several headwinds including slowing U.S. profit growth, continuation of the sub prime crisis, and persistent hawkishness by certain central banks. However, a bear market is very unlikely as interest rates and inflation are low and equities remain attractively priced,” it stresses. “Moreover, U.S. firms are underleveraged, leaving them with room to absorb negative shocks.”

“Equities should undergo more stress but the bull market that started in 2003 is intact,” it concludes.