The S&P 500 index plunged 11 percent from Aug. 17 to Aug. 25, but has rebounded 4.5 percent since then. And ace market strategist Edward Yardeni, president of Yardeni Research, says the rebound may continue.

"Investors are fretting over lots of known unknowns," he writes on his blog. That includes the depth of China's economic slowdown, Yardeni says. "Might it be hard enough to cause a global recession?"

Then there's the recent plunge of commodity prices to 16-year lows. That "might be good for consumers, but bonds issued by commodity producers are at risk of default," Yardeni maintains.

In addition, "if the Fed does start raising rates, might that cause a massive unraveling of global carry trades?" Yardeni asks. Many economists expect the central bank to begin raising interest rates at its meeting next week.

Given all the unknowns, it's "no wonder investors aren’t in a festive mood," Yardeni says. "Nevertheless, stocks may be set up for yet another relief rally if all the worst-case possibilities of the known unknowns don’t unfold."

And the U.S. economy remains "resilient and strong," he says. GDP grew 3.7 percent in the second quarter, though the Atlanta Fed's forecasting model puts growth at just 1.5 percent for this quarter.

Doug Kass, president of Seabreeze Partners Management, is less enthusiastic about stocks.

"The S&P 500 is now in the process of testing the capitulation low of around 1875 that it reached two weeks ago," he writes on his blog. "That bottom produced new 52-week lows in 1,335 individual stocks, the greatest since 2008." The S&P 500 closed at 1,952.29 Thursday.

The 1,875 level will likely hold, Kass says. "But I can’t rule out a larger decline, particularly since this is quickly becoming the developing consensus. A major top is likely to be in place for some time."

He expects the index to trade between 1,875 and 2,025 for the next six months and to show a loss between 5 and 10 percent for 2015 as a whole.

As for valuations, the S&P 500 carried a trailing price-earnings ratio of 20.35 Friday, up from 18.97 a year ago, according to Birinyi Associates.

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