Don't get too comfortable, bulls.

Although the Dow Jones Industrial, S&P 500 and Nasdaq Composite have had rough goes of it since August as investors fret about a heavy-handed Federal Reserve, all three major stock indices remain well off the mid-June lows.

Some Wall Street pros say the fact stocks still haven't re-tested the lows reflects optimism the U.S. will avert a recession in 2023 while the Fed is likely to engineer a soft economic landing.

But top Goldman Sachs strategist Peter Oppenheimer warned in a note that the bulls should be on high alert since as the bear market is not over yet.

"Our Bull/Bear Market indicator (GSBLBR) and our Risk Appetite indicator (GSRAII) attempt to capture the fundamental and sentiment factors that are important around inflection points," Oppenheimer explained. "Combining these can provide a useful guide, particularly when they are both close to extremes. When GSBLBR is below 45% and the GSRAII is below 1.5, the probability of achieving high returns over 12 months is very high. The current levels of these indicators would suggest that we are not yet at the market trough."

Here are the details behind Oppenheimer's call on the bear market still being in play.

Reason #1: Brace yourself for still high inflation and rising interest rates.

"Inflation may be close to a peak but the levels of inflation may stay elevated for some time, putting upward pressure on rates relative to current market pricing," he wrote. "At the same time, our economists argue that there is a narrow path to a soft landing that requires policymakers to (i) slow GDP growth to a below-potential pace in order to (ii) re-balance supply and demand in the labour market enough to (iii) bring down wage growth and, ultimately, inflation."

Oppenheimer added that "the most recent central bank commentary and the Jackson Hole statement have been hawkish again: it noted that, while it will become appropriate to slow the pace of tightening 'at some point,' the FOMC remains committed to bringing inflation down. Similar comments have emerged in Europe."

Reason #2: A slow growth backdrop persists.

"Strong private-sector balances may help to moderate any economic downturn but many of the problems that economies are currently facing stem from profound supply-driven issues, not demand," the note stated. "It is not clear that a peak in interest rates alone will provide a lasting solution. Meanwhile, constraints in labour and commodities may well contribute to weaker growth and lower profit margins. While recessions could still be relatively shallow compared with many in the past, there is still a greater than even chance that investors will price more recessionary risk as interest rates continue to rise."

Reason #3: Stock valuations aren't cheap enough.

"As we see in the next section, however, optimism over the path for monetary policy and inflation is just one of the factors that typically triggers a recovery into the next bull market," Oppenheimer wrote. "Valuation and positioning are also important. Since other conditions that are typically in place before a sustained recovery are not yet evident, we see the current rally as temporary and not the inflection point marking the start of the real ‘Hope’ phase."

Oppenheimer's history lesson bear markets, for your consideration.

"On average, bear markets last 44 days and the MSCI AC World return is 10% to 15%," the note stated. "Cyclicals outperform Defensives 83% of the time and by 4% on average. We find a similar result at the regional level; emerging markets outperforms developed markets 67% of the time. During these periods there is no clear pattern in the performance of Value vs. Growth or Small vs. Large Caps."

The note continued: "In this context the recent rally since June 22 is, in our view, a bear market rally. Its duration and magnitude were not unusual relative to the experience of previous decades. We expect further weakness and bumpy markets before a decisive trough is established."

From the Yahoo Finance Live archive: Oppenheimer strikes cautious tone on stocks Feb. 4.

Oppenheimer at the time (which has proven correct): "The market is beginning to differentiate very much across different companies according to how they're doing in terms of earnings and their outlooks. And I think that's a relatively healthy thing."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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