Many of the short-term technical indicators I follow have turned bearish in the past few days: market breadth and internals, although having not broken down during the last correction, have not been strong during this week's rally. There were eight up days in the past ten days, and the market is back to a short-term overbought condition.
Since in my opinion, valuation levels do not provide for strong long-term returns, the only case that remains to buy stocks now is that, in the mid-term (a few months), the economic recovery is going to be strong enough to support those lofty profit expectations, but not strong enough that the Fed is going to remove accomodation any time soon. This is a thin line the market is walking. Some call it a bubble.
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