Three years ago we lived in a world that thought it had tamed macroeconomic volatility through independent central banks and inflation targeting. 'Black swans' - low probability but high impact events - were thought to have been eliminated by sophisticated risk management and securitisation. Investors and companies were lulled into thinking that 'all swans were white'. With the benefit of hindsight we now know that nothing was further from the truth. In retrospect, the biggest mistake during the 'great moderation' was to imagine that the business cycle was dead - rather than simply in suspended animation.

Three years on and we find ourselves in a world where black swans are everywhere. Investors and corporates alike live in constant fear of low-probability, high-impact events. They have hunkered down in defensive mode and now wait for their competitors to make mistakes. Global multinationals continue to cut costs as though there were no tomorrow. Welcome to the world of the 'new normal', a world where structural change lords it over the business cycle. However, with apologies to the philosopher Karl Popper, the sighting of just one white swan should disprove the thesis that all swans are now black. And wouldn't it be ironic if that white swan turned out to be the rediscovery that the business cycle was not dead? Indeed, the biggest macro shock for many investors may not be another downturn - the 'double-dip' that dominates today's conventional wisdom - but rather a strong cyclical recovery spurred on by the massive fiscal and monetary stimulus.

Investors, who three years ago would not have given the time of day to a macro-strategist, are now convinced that a whole flock of macro black swans are set to undermine markets in 2010 and beyond. For many, the fears relate to private sector deleveraging, and are focused on anaemic consumer spending, persistent high unemployment and weak housing markets. For some, it is the lack of bank lending to small and medium sized companies that prevents a pick-up in investment and sustained economic recovery. Or that the counterpart to rising private sector surpluses is ballooning public sector deficits that will become increasingly difficult to finance. For others, it is the withdrawal of quantitative easing and the prospect of rising rates that are certain to undermine any recovery.

David Fuller's view Like old time fire and brimstone religion, extremely bearish forecasts always attract a following. Their market adherents are not without evidence and reasons for concern: two severe bear markets within a decade; many OECD governments up to their eyeballs in debt, unemployment high, more banking scandals falling out of the closet, rioting middle-aged Greek retirees, "new normal" forecasts which are certainly not pretty, two devastating earthquakes so far this year and global warming to worry about when we are not freezing. Anyone heard about the next doomsday rock hurtling in our direction?

Stock market corrections towards their rising 200-day moving averages have emboldened bears rather than encouraged bulls, judging from market forecasts. Anything that is not going down is described as a bubble. To paraphrase Sean Connery's latest TV commercial: Back to common sense, it's time for a reappraisal.

The short-term good news is that a silent majority of bulls are buying because major stock market indices have rallied from their rising 200-day MAs and some are beginning to test their recovery highs. This means that investors with stock market long positions can sleep at night, provided that the February reaction lows are not retested, let alone broken.

OK, David, but what about the longer-term perspective? Good question, especially as no one can predict the future, although the Cassandras seem happy enough to have a go. I suggest that you may wish to be influenced by your answer to the next question: Do the two bear markets commencing in 2000 and 2007 make it more or less likely that we will have a third bearish event in the not too distant future?

My guess is that not every subscriber will give the same answer to this question. Behaviourally, we know that an extreme market event such as a burst bubble or event-triggered crash will cause many investors to fear a repeat, or in our present circumstances, a 'threepeat'. This response has been hardwired into our brains since our early ancestors were living in caves and part of the food chain for other clans and animals. Logically, I suggest, another stock market collapse is unlikely, not least because US mutual fund data shows that during the last year investors have chosen bonds over equities in record numbers.

The most likely outlook for stock markets, I believe, is for either a continuation of the cyclical bull market or a cyclical boring market, which mostly drifts. Meanwhile, monetary conditions remain accommodative, long-dated interest rates remain rangebound at levels well below the historic average and the price of crude oil is still rangebound, albeit with a slight upward bias. At some point this benign background will dissipate and eventually reverse, probably because the global economy strengthens, led by developing (progressing) Asia, Latin America and resources producers among developed economies such as Australia and Canada.

Fullermoney themes remain generally firm. Precious metals have rebounded following their correction and industrial commodities are mostly firm. The euro's weakness has created some additional trading opportunities among the region's exporters and I may open a long trade or two.