U.S. stocks just had a horrendous week.  The S&P 500 Index dropped 92.9 points, or 7.2 percent, which was its worst performance since November 2008.

From July 25, the market is down over 10 percent, which officially qualifies this market downturn as a correction.

The big question is if this correction is a buying opportunity or a sign of more trouble to come. 

The bulls believe U.S. stocks, valued at about 12 times the earnings, is historically cheap and a great bargain.

They argue that the historic length of U.S. economic expansions should take it well-beyond 2012.  Billionaire hedge fund manager John Paulson, for example, argued in 2010 that the average length of economic expansions after the last two U.S. recessions was 32 quarters.

The current economic expansion, therefore, likely has legs to go much further than August 2011.

Laszlo Birinyi, who called the U.S. market bottom in March 2009, said the current expansion should last until at least 2013 based on the length of prior advances, reported Bloomberg.

However, other respected investors are more cautious, arguing that the U.S. economy and markets are propped up solely by the U.S. government.  That support, however, will at some point fail and the markets will come crashing down. 

Legendary investor Jeremy Grantham, widely respected for steering clear of financial bubbles, put the fair value of the S&P 500 at 900 early in 2011. 

Graham has consistently argued that the stock market is propped up by the Federal Reserve's loose monetary policy.  Moreover, he hinted that the fiscal largess of Washington, especially in the third year of an election cycle (e.g. 2011), also props up the economy and market.

However, government stimulus isn't sustainable and Grantham half-jokingly predicted that the market will fall by October 2011.

If Grantham is right on the big picture of the U.S. markets and economy, he may just have been two months late on his call.