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The market turmoil continued Tuesday as weak data out of China pushed all major U.S. indices down more than 2 percent. The S&P 500, Dow Jones industrial average and Nasdaq composite have now fallen a respective 6.5, 9.5 and 1 percent year to date, and according to one renown technician, the move may have signaled the end of one of the longest-running bull markets in history.
Looking at a chart of the S&P 500, Louise Yamada noted that momentum has been declining for four months, which by her work, is a "classic" sell signal.
"This is suggesting to me that we are looking at a bear market," said Yamada said Tuesday on CNBC's "Futures Now." Yamada noted that the last two times the market saw a similar shift in momentum were in January 2008 and June 2000.
The stock market has suffered wild swings over the past two weeks, declining sharply before staging a powerful two-day bounce that erased some of the initial losses.
The speed of the moves, particularly after a long period of market quiescence, has led some to suggest that the market is dominated by thoughtless "algos" (or automated) trading—or perhaps is simply irrational.
But in fact, there may be a way to make sense of the swift move lower—if not on an day-by-day basis, then at least in a slightly broader context. Indeed, a classic finance paper dating back more than a decade may provide a coherent explanation behind why markets might be crazy like a fox.
As stocks attempt to come back from a historic market selloff, Euro Pacific Capital CEO Peter Schiff said any gains, including Tuesday's bounce, are "notoriously suspect."
Stocks tumbled into the close on Tuesday, marking the sixth-straight day of losses for major U.S. indexes and erasing all gains from the day's brief rally.
Schiff has been vocal about his bearish take on the U.S. stock market, and his belief that another round of quantitative easing is coming. Speculators on Wall Street have called a raise in interest rates anywhere between September and next March.
But Schiff isn't wavering on his stance that a rate hike at this time could send the U.S. economy spiraling into a recession, especially given the past week's market plunge.
"For awhile, people thought that the stock market can handle higher interest rates. That was just a pipe dream. They can't," Schiff said Tuesday on CNBC's "Futures Now." "That's the only thing propping up the market."
According to Schiff, the prospect of rising interest rates is the main driver behind the selloff.
"People want to blame it on China, but it's not about China. The U.S. market was falling before the Chinese slight devaluation," Schiff said.
"There has been a lot of technical damage done, and if the Fed isn't going to come out and come clean about the fact that it's not raising rates, I think this correction will turn into a bear market," he added.
Schiff is known for his bold predictions, including his call on the 2007 housing crisis. He also previously said that gold will go to $5,000.That has yet to happen, but Schiff is sticking to his bullish call.
Gold has fallen more than 10 percent in one year to $1,140. However, Schiff said Tuesday that the precious metal is ready to rally.
"There are a lot of people who are short gold who are going to be in for a world of hurt when this price starts to move back up," he said. "We get back above $1,200 and it's going to be some real pain for those shorts."
Here's some bad news for those sniffing out a bargain in stocks: even after a horrendous week, the market is still trading at an elevated valuation by historical standards.
The S&P 500 slid 5.8 percent in the past week for its worst week since September 2011, taking the large-cap index negative over the past year.
That has some looking to buy. On Friday, Kevin Landis of Firsthand Capital Management said that "all you can do now is try to take advantage of it—take a deep breath, take a look at the lay of the land, and you're going to be glad you did six months from now."
Similarly, Bob Doll of Nuveen Asset Management said Friday that "If you've been one of these people that's been on the sideline as many have waiting, waiting, waiting to put some money in—for goodness sake take advantage and put some money in."
But there's a problem with getting into stocks based on the premise that the recent slide is creating an attractive value proposition.
At Friday's close, the S&P 500 traded at 16.1 times analysts' estimates of the earnings that companies will report over the next year, according to FactSet. This metric, known as the market's forward price-to-earnings ratio, has indeed fallen over the past five months. But it is still well above its ten-year average of around 14.
The backward looking last-twelve-months P/E ratio, which compares current prices to the earnings companies actually reported, is sitting at 17.5. Like the forward P/E ratio, that's not only above historical averages, but above where it was a year ago, per FactSet.
"That strikes me as high," commented David Blitzer, chairman of the S&P Dow Jones Index Committee. "We're in a situation where the valuation does get worrisome, especially since there have been questions about U.S. earnings," given concerns around China and the rest of the emerging markets.
"Some kind of a correction was due," he told CNBC in a phone interview.
The biggest selloff of the year hasn't dented the confidence of the Street's biggest bull.
The S&P 500 and Dow Jones Industrial average both fell more than 2 percent Thursday, marking the worst trading day for both indexes since February 2014. But Tom Lee, who has been one of the most bullish strategists on the Street for years, sees "positives in the market," and he's using the rare selloff as a buying opportunity.
Read MoreWhy have stocks dived this week?
"I think the housing recovery trumps what is happening right now in energy," Fundstrat's founder said. Housing starts in July rose at a seasonally adjusted rate of 1.21 million to their highest level since October 2007 and marking the third time in four months that figure reached a new post-recession high. "Housing is big enough to move the needle and more than offset the energy-related downturn," he added. "There's still a lot of upside for housing equities."
Before Thursday's brutal selloff, the XHB homebuilders ETF, hit an eight-year high this week.
Lee also sees encouraging signs in the technicals in the market. According to his research, the percentage of stocks hitting 52-week lows as a percentage of total stocks hitting 52-week lows and 52-week highs is above 85 percent. Since 2002, stocks have rallied 94 percent of the time in the month after the measure has hit that level, by Lee's work.
"Sentiment right now is awful," said Lee. "It's been a really tough couple of weeks. But the reality is when you're not feeling comfortable that's usually a better time to buy than when you're feeling confident."
Gold is reclaiming its safe haven status.
The precious metal rallied this week to one-month highs after Fed minutes released on Wednesday hinted that a rate hike might not happen in September. Gold prices are now up more than 6 percent from the late-July low and in the midst of its best week in five months, but the sharp rally has one gold bull yielding caution.
"I think what's happened over the last week or two is there were so few contracts being long that short positions topped out," Bob Alderman said Thursday on CNBC's "Futures Now." "I think these shorts are providing fuel to exaggerate [this] upside move since they run for cover."
According to the Commodities Futures Trading Commission, total short positions in gold futures have dropped more than 8 percent from July 14, where it hit the highest level in more than two years.
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