  We present a general methodology to incorporate fundamental economic factors
to our previous theory of herding to describe bubbles and antibubbles. We start
from the strong form of Rational Expectation and derive the general method to
incorporate factors in addition to the log-periodic power law (LPPL) signature
of herding developed in ours and others' works. These factors include interest
rate, interest spread, historical volatility, implied volatility and exchange
rates. Standard statistical AIC and Wilks tests allow us to compare the
explanatory power of the different proposed factor models. We find that the
historical volatility played the key role before August of 2002. Around October
2002, the interest rate dominated. In the first six months of 2003, the foreign
exchange rate became the key factor. Since the end of 2003, all factors have
played an increasingly large role. However, the most surprising result is that
the best model is the second-order LPPL without any factor. We thus present a
scenario for the future evolution of the US stock market based on the
extrapolation of the fit of the second-order LPPL formula, which suggests that
herding is still the dominating force and that the unraveling of the US stock
market antibubble since 2000 is still qualitatively similar to (but
quantitatively different from) the Japanese Nikkei case after 1990.
