OK -- let's look at this from the bullish and bearish perspective.
Bull: Corrections are healthy and represent buying opportunities. That's all this week's drop-off was. The economy is slowing into a perfect Goldilocks soft-landing. While GDP growth has slowed, it is nowhere near recessionary levels. Incomes are rising. Manufacturing is showing signs of improvement. Unemployment is low. Housing damage has been contained to the housing sector. Consumer spending is showing signs of continued strength.
Bear: This is just the beginning. GDP was revised down. New home sales plunged. The inventory of new and existing homes increased on a months available basis. This will eventually hit consumer spending. The sub-prime market problems are just beginning. We still have historically high debt levels at the federal and household level and debt payments/disposable incomes are at records. The rally is long in the tooth.
I think housing continues to be the main wild card in both scenarios. Housing damage is still largely contained to the housing sector. I have no idea if that will continue, but the record so far says it can be.