By Nick Godt, MarketWatch

NEW YORK (MarketWatch) -- Alain de Botton, a British philosopher and author of best-selling books such as the "Art of Travel" and the "Consolations of Philosophy," has recently been asking this question: Is success always earned? Is failure?

Similar questions undoubtedly went through the minds of some investors over the past week as Greece edged closer still to default on its debt while Goldman Sachs Inc.'s (GS 145.20, -15.04, -9.39%) troubles with the law got worse.

But markets don't stay philosophical for too long. On Friday, as Goldman shares plunged another 9%, the Dow Jones Industrial Average (INDU 11,009, -158.71, -1.42%) slumped 158 points to 11,008.

Both the Dow and the S&P 500 index (SPX 1,187, -20.10, -1.67%) saw to their worst weekly drop since late January, while the Nasdaq Composite (COMP 2,461, -50.73, -2.02%) fell the hardest, losing 2.7% for the week.

It was because of an unregulated and gigantic financial world that the financial crisis spread, and only through massive global government interventions that a recovery was engineered.

But notions of success and failure aren't the same with unemployment at 10% in the U.S. and growth seriously threatened in Europe.

Paul Mendelsohn, chief investment strategist at Windham Financial Services, notes that both Greece and Goldman serve to reinforce a mistrust of governments and currencies. See story on gold reaching four-month highs.

Contrarian success

Still, contrarian investors betting that stocks would continue to climb the proverbial "wall of worry" during the month of April have earned their stripes, or can claim, at least, some degree of success. The Dow gained 1.4% for the month, while the S&P 500 gained 1.5% and the Nasdaq jumped 2.6%.

Beyond the reality of the very serious problems faced by Greece and the risks of contagion, or the legal troubles at Goldman Sachs and at other financial firms, the past week's slump comes in the context of a stock market that's increasingly shown signs of exuberance -- of the irrational kind.

Dave Rosenberg, chief economist and strategist at Gluskin Sheff, warned this week that his ratio of trading volume on the New York Stock Exchange versus volume on the Nasdaq, a sign of speculation, was surging beyond levels seen during any period in the past 10 years.

That does put into context Friday's merciless action on MEMC Electronic Materials Inc. (WFR 12.97, -2.97, -18.63%) , the maker of silicon wafers for the solar and semiconductor industries, which saw its shares tumble 18% after swinging to a first-quarter loss.

The latest Investors Intelligence survey showed the highest level of bullishness since the market's last peak in 2007.

Meanwhile, the market, as measured by the broad S&P 500, has rallied nearly 80% since March 2009, marking the "sharpest up-move since the bungee jump in 1932-33", Rosenberg - the former star economist at Merrill Lynch, likes to remind.

Correction nears, guru says

A month ago, market guru Woody Dorsey, founder of Markets Semiotics, said stocks had more room to climb but that by the end of April or early May, bears should get their way all the way through June. Read more on Dorsey's prediction.

In his latest update, he confirms "that a turn is near and a 4-6 week decline is due."

Dorsey, who monitors trends and investor perceptions, more than fundamentals, still sees a "global tightening trend" emerging that might cause weakness for a stock market that has been fed by the massive liquidity injected into the system by global central banks over the past three years.

The trigger event for a correction is usually one that's known, just not recognized by the market, Dorsey says.

This past week, of course, the Federal Reserve kept interest rates near zero and kept its pledge to keep them low for an extended period. With unemployment still near 10% and fears that European and global growth will be curtailed, the case to keep interest rates low remains stronger than ever.

"The recovery is not on solid footing and the Fed knows that, which is why it's so reluctant to be less accommodative," says Hugh Johnson, chairman of Illington Advisors.

A week ago, bullish stock investors viewed continued signs of economic strength and rising earnings coupled with an accommodative Fed as the perfect world.

But if they increasingly see it as a continued desperate sign to keep the post-crisis economy afloat in a world where global growth is also threatened, sentiment might turn on a dime.

The coming week will bring the key U.S. April employment report, which could bring down stocks as easily as the March numbers had helped propel the rally.