IMO the four year rally which led to a new high in nominal terms (although nowhere near that in real terms) is now over and the large-scale bear market that began in 2000 has resumed. My view is that this decline has very much further to go to the downside. It may stair-step down with rallies of different sizes along the way, some of which might whipsaw the markets up and down very sharply (ie volatility should be a prominent feature), but I think the overall trend will continue to be down, perhaps for several years. I would expect it to involve the unwinding - perhaps rapidly as thresholds are crossed - of enormous leveraged positions, which would wreak havoc with the derivatives market and the banking system. IMO the effect would be strongly deflationary.