The purists hate this kind of market because it is all about the possibility that the central banks can reverse the course of business events.
It is without a doubt that if the Federal Reserve weren't accommodative we would be appreciably lower. So the purists, not seeing any results so far from the Fed, naturally believe we MUST be headed appreciably lower. It's just a matter of time.
The problem with that analysis is that during the time we have gone up gigantically. And if you can just dodge the companies that say something bad, you have been able to make a lot of money until this recent pullback.
I think it's just too hard for most people to relate what seems to be futile activities by central banks to positive stock prices. But put it this way: we have yet to see a gigantic estimate cut for any company save coal. Now, you might think that in two weeks the parade of horrendous earnings is going to begin. I come back and say that this reset we have just gotten is going to cushion some of the disappointment and what isn't cushioned by this decline will be cushioned by more accommodation.
I know that seems like a win-win, but that's not what I am saying. I am simply pointing out that we haven't seen a dramatic plethora of preannouncenments because things aren't horrendous. Sure, we point out Norfolk Southern (NSC), Bed, Bath (BBBY) and FedEx (FDX). But we have had a huge number of companies report in the last month and for the most part the earnings are really pretty good.
So, to me, if you have fairly good earnings and you couple that with accommodation by central banks globally, that adds up to a reason to buy the dip, not sell it. There's simply not enough bad out there and what's really bad can be offset by the stimulus, which is why I think we held up under the hideous onslaught earlier in the day.