What do these historical incidents suggest about the current situation? While the U.S. is likely experiencing a profit recession, or at least a profit drought, it shouldn’t be long or deep absent a full-blown recession. Assuming U.S. economic growth remains positive, a technical profit recession is unlikely to last more than a few quarters.

Further dollar appreciation will probably be more muted and slower than it was earlier this year, given U.S. growth is on a lower-than-expected trajectory and the Federal Reserve (Fed) is likely to be particularly timid in raising rates.

As for oil, I believe oil prices have probably bottomed, with the negative impact of lower prices likely to fall out of energy company earnings by the first quarter of next year. Also, with the weight of energy companies in the S&P 500 down to roughly 7 percent, about half of the level in early 2011, according to Bloomberg data, energy prices shouldn’t impact the broad market as much as they have in the past. (Technical Signals Oil Has Bottomed)

Where Investors Can Go From Here

So, investors should look past this temporary profit drought and focus on the real economy. How the U.S. economy fares in 2016 will be key for determining whether or not the current profit blip is simply an interruption in the long-term bull market or the beginning of the end.