The U.S. stock market is on the rise again. It was quick to shrug off the worrisome news, and the bull market remains solidly intact.

Fast whip, but not so bad

Even though the recent downward correction scared many investors, it really wasn't that bad. In the end, the Nasdaq, which has been the strongest index, only declined 5.9%. And as you can see on Chart 1, that's really insignificant considering the rise it's had since late 2012.

On the other hand, the Dow Industrials was the weakest index. But even in this case, the Dow's downward correction was 7.2%, which was not that steep following last year's strong rise.

Watch the Nasdaq

Currently, it looks like the downward corrections are over. The markets are rebounding from oversold levels, and they're gaining momentum. This strongly suggests stocks are headed higher. This has been confirmed by the Nasdaq, which surged above its January high at 4245.

Since Nasdaq was the strongest, it was the first to confirm last week. This week, the S&P500 is reinforcing this bullish outlook by hitting a new record high. If the other stock indexes now follow and also rise above their December-January highs, it'll be a major confirmation that a renewed rise within the bull market is indeed underway.

Bullish environment

The fundamentals are also reinforcing this. And they've been driving stocks higher all along. Interest rates, for instance, are declining and new Fed head, Janet Yellen, again reiterated they're going to stay low for a long time. That's great news for stocks because they thrive in a low interest rate environment.

The Fed's also going to keep its quantitative-easing program going. That's been good for both the economy and stocks. And even though the Fed's going to continue tapering, monetary stimulus will keep a solid foundation under the stock market, like it has since 2009.

Bullish indicators

Also important, the technicals remain very bullish. All of the major U.S. stock indexes, for instance, are holding well above their 65-week moving averages (see the chart above). These identify the major trends and they're signaling a solid bull market remains in force. As long as it does, stocks are going to rise further.

Panic?

Another interesting point is investor sentiment. Many investors began to panic when stocks declined only a couple of percentage points. When this happens, it's usually NOT the sign of a top. At real tops, investors are normally super bullish. Everyone is invested and very enthusiastic, like during the tech boom in 2000. That certainly wasn't the case this time around. As we saw, sentiment was quick to turn bearish on a dime.

Our recommendations

We continue to recommend buying and holding stocks. For new positions, our favorite is the Powershares Nasdaq QQQ, -1.27% .

Stops are a good thing

At this point, all investors may want to put stop losses on their stock positions. If you do, we'd keep it at about a 15% trailing real or mental stop. That is, if a stock drops 15% or more, you'll automatically sell it.

If that makes you uncomfortable, then a tighter 10% trailing stop is also okay. The only problem with a tighter stop is that you could get stopped out during times of volatile market action within the bull market.

On the downside, stocks will show real renewed weakness if they decline and stay below 4000 Nasdaq, 1735 S&P 500 and 15350 Dow Industrials.