Here's piece of contrarian info that supports the Commander's thesis. This AM the front page of the 'L A Times' has a headline that reads: 'Dow at Record, Can it Top 20,000?' Makes a guy nervous but it would be nice to have a blow off top...
I'll give another example, PG sells for 19X earnings estimates that end this June. Their growth rate, not always consistent, is 6%, so they are selling at 3X growth rate. At best PG should sell for 12X PE.
Gulley, that sort of headline does usually mark a top as projections of far out high numbers are indicative of excess enthusiasm.
Current view is fairly simple-I think "bad" macro-econ news out of Europe will #$%$ the markets lower with the $ moving higher-ECB won't intervene until Germans relent on active QE. The "consensus" of the markets is to buy on "soft" news anticipating central banks BOE and ECB will intervene before "soft" data becomes "bad". In summation, if is a function of timing. I think things have to get worse, looking to get poorer, whereas the "consensus" is to continue to chase stocks up knowing QE will come to the rescue.
As an example: the Spanish 10 yr bond has been up 10 days in a row-under the assumption that ECB QE is coming soon given what is happening in Italy. I think that is nuts. The Germans and Dutch won't let QE become active until the Euro-zone macro-econ situations get worse, leading to falling financial markets-perhaps setting up a self-reinforcing negative loop. QE is not coming while stocks and some commodities are rising. More QE out of the BOE and ECB won't come until "fear" comes back into financial markets.
In the meantime, the reward/risk ratio gets worse as the "consensus" keeps chasing stocks up.