Bull Market Could Get Rocked if Oil Keeps Rising

With market complacency and optimism both nearing levels unseen since before the financial crisis, the market either has A) put the damage of the past two and a half years behind it, or B) is setting up for a fall.

While the prevailing current in the market is towards "A," swelling commodity prices are putting "B" into play, particularly if energy prices continue their relentless move higher.

"The 2008 and 2009 era of financial crisis is pretty much behind us. Most investors would agree with that," says Andrew Wilkinson, senior strategist at Interactive Brokers. "What's overhanging the market now is this great big question mark over commodities. It has hung over the market like the sword of Damocles."

Despite a healthy rally Friday, stocks have done virtually nothing for the past seven weeks. The 1,315 level for the Standard & Poor's 500 on Feb. 22 looked a lot like the 1,314 where the broad gauge opened Friday.

Early earnings reports have had little effect overall, despite some significant disappointments from big banks and Google.

But in other ways, the market looks a lot like the one just before stocks started coming off their record highs in October 2007, a decline that would accelerate as some of Wall Street's most venerable financial giants began vanishing into the dust of the subprime mortgage debacle. (read more)