Almost four years to the day (March 9, 2009) when it reached its low point during the 2007-2009 bear market, the Dow Jones Industrial Average (DJIA) has regained all of those losses and more. The Dow has wiped out the 54% loss it suffered during the bear market, and shows signs that it may continue its bullish run. But the recent run-up has left investors with a wide range of emotions from bearish pessimism to bullish optimism, as well as regret for those investors who have missed the run-up.

There are several reasons for investors to be optimistic that the Dow’s rally still has legs and may continue on its bullish tear. For one reason, the mood in the market lacks the same exuberance seen in 2000 and again in 2007, before the two most recent bear markets. Andres Garcia-Amaya, a global market strategist for JP Morgan Funds stated “We don’t think we are seeing exuberance in the current market. The entire rally has been hated. And that makes us feel more comfortable.” Joe Quinlan, chief market strategist at U.S. Trust added, “Stocks are under-owned by both retail and institutional investors.” Quinlan added that there is still a lot of cash sitting on the sidelines and that investors could continue to fuel the market as investors put money back in.

There are other reasons to be optimistic that the Dow’s run will continue. Factory activity in the U.S. continues to increase, indicating an improving manufacturing environment. U.S. businesses and consumers are spending more money, and consumers are adding more debt after months of austerity. The housing market continues to improve in both home volume and prices as troubled mortgages work through the system, and more borrowers qualify for mortgages. And finally, the Dow’s valuation is 20% cheaper than it was in 2007, in terms of its price-to-earnings ratio.

But naysayers see reason for their pessimistic viewpoint. Walt Zimmerman, a technical analyst at United-ICAP has a bearish take on things, “The attitude investors should have is that they are walking on thin ice. The ice is softening and they should be listening for cracks. Every reliable technical tool is warning of major peaking action.”

So which direction will the Dow head next? Nobody knows for sure, and there is evidence to support both viewpoints. It seems likely that the Dow will continue climbing higher for the foreseeable future as favorable economic conditions persist including a large amount of investors’ cash on the sidelines, an economy that is recovering at a plodding pace, and historically low interest rates that make fixed income (bond) investments very unattractive currently.