NEW YORK, Mar 28, 2009 (AFP) - The Wall Street resurgence of the past weeks has pundits pondering: Has a new bull market begun after 17 months of horrific losses? Or is this just another heartbreaking "bear market" rally?

Bulls and bears both claim evidence in their favor after three consecutive weekly gains for the main US indexes.

Over the week to Friday, the Dow Jones Industrial Average lifted 6.84 percent to 7,776.18 and the Standard & Poor's 500 index rallied 6.17 percent to 815.94.

The technology-heavy Nasdaq posted a weekly gain of 6.03 percent to end Friday at 1,545.20.

The major indexes have rallied at least 20 percent from lows hit in early March, giving rise to claims that the bear is dead and a new bull market has arrived.

Robert Brusca at FAO Economics called the 20 percent jump "a technical signal to kill the bear market."

Not so fast, say the bears.

Even with hefty gains, the Dow index of blue chips and broad-market S&P 500 index remain down more than 40 percent from all-time highs hit in October 2007. Hence, the bear is still alive, by these measures.

Bob Dickey at RBC Wealth Management said it is too soon to call a new bull market despite the snapback.

"In olden times, these moves may have qualified as a new bull market, but in this day of much higher volatility, it will take more of a gain to reverse the bear trend, which, according to our measures, would take a move above 8,500 on the Dow to become official," he said.

"That would mean waiting for a move of over 30 percent from the lows in order to create more bullish confidence."

Still, he said the horrendous selloffs may have led to "major market lows," in early March, "which makes us lean heavily in favor of a more meaningful uptrend than the bounce we have had so far."

In the coming week, the market must grapple with grim economic realities: March US auto sales are expected to show more hefty declines, and Friday's payrolls report is likely to reflect staggering new job losses, making it harder to sustain a recovery.

But many analysts say there are hopeful signs that the US economy may be stabilizing after a long and deep recession, which could mean the stock market will find its footing as well.

"Despite the doom and gloom outlook by some economists and the pessimistic feel on Main Street, recent economic data has shown signs of improvement," says Kathy Lien at Global Forex Trading, citing upturns in consumer spending and several indicators on manufacturing.

"Although this is partially due to the overly pessimistic forecasts, the data also suggests that the economy could be stabilizing."

Larry Kantor at Barclays Capital says markets are ready to look forward to rosier times.

"We believe that the latest rally will have stronger legs, and thus marks an inflection point," he said.

Kantor said the aggressive efforts by policymakers around the world and a massive decline in inventories sets the stage for better economic output.

"Reflecting all of this, we are now recommending that investors become more aggressive and take risk across a broader range of assets," he said.

Ed Yardeni at Yardeni Research said he believes the "bottom" probably occurred during trading March 6 when the S&P index fell to "the devilish level of 666 on an intraday basis."

"The March 6 bottom was made on worries that the government would have to nationalize the banks. A number of developments have greatly reduced the likelihood of that outcome," Yardeni said.

Chris Konstantinos at Riverfront Investment Group said the current environment calls for prudence.

"Despite the market rally and improving rhetoric on Wall Street, we're not convinced we've seen the end of the bear market," he said in a note to clients.

"However improved rhetoric means that for the first time in a while, greed is starting to win out over fear and that's precisely why these times call for a discipline" in investment strategy.

Bonds were mixed for the week. The yield on the 10-year US Treasury bond rose to 2.761 percent from 2.625 percent a week earlier and that on the 30-year bond fell to 3.618 percent against 3.654 percent. Bond yields and prices move in opposite directions.

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Copyright AFP 2009.