Birinyi Associates, led by renowned stock guru Laszlo Birinyi, remains somewhat bullish on stocks, but admits to a good deal of uncertainty.
In a commentary obtained by MarketWatch, the firm says the S&P 500 index has a 60 percent chance of reaching its year-end target of 2,100, down from an 80 percent chance a month ago.
The S&P 500 closed at 1,877.70 Tuesday, down 7 percent from its Sept. 19 record high.
"The stock market has had a detour, and investors are—and should be—concerned," Birinyi Associates says.
"We continue to expect higher prices, but recognize that there are significant issues which should be addressed. Our biggest concern is that we are not sure as to what is happening."
Several factors worry Birinyi Associates, including the oil price decline, sluggish global economic growth and excessive optimism toward stocks on Wall Street.
Comments "such as ‘another 10 years’ and the ‘next move will be up 5 percent’ have not been especially persuasive," the report says.
Meanwhile, Sterne Agee's chief market technician, Carter Worth, says that though buying into stock market declines has paid off handsomely over the past three years, the strategy is likely to stop working at some point.
Investors are being lulled into a false sense of security, he told CNBC. An end to the buy-the-dip mentality is "ultimately what I think is coming," he said. "Enough people are going to get hurt where they're not going to play that game anymore."
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