Doug Kass has an interesting column on Real Money in which he sets forth the many concerns he has about this market and the reasons for his bearish view right now. Doug's arguments are certainly logical and compelling, but I see no reason to embrace his view.
He might be 100% correct about all the terrible things that could eventually kill the market. The problem for me, however, is that there is no proof that these concerns will ultimately matter. The price action simply does not reflect this now. Stocks are acting well, the technical patterns are good, we are entering earnings season and the best time of the year seasonally. The chart that I care about most is the Russell 2000 ETF (IWM) , which has been in a trading range since February and is in great shape for a potential upside breakout.
A major part of the difference in our views of the market is stylistic. I am reactive and manage risk by moving quickly. I don't need to predict what will happen weeks or months from now. I just need to deal with what is happening today.
I understand and appreciate all the reasons that support a bearish view, but until the price action starts to shift, I'm going to ignore the pessimism. For me, the opportunity cost of anticipating market downside is just too high. Hopefully, I can generate a large cushion of profits while the market is acting well and then react quickly and move to cash when the character of the action changes. I don't know if that will be next week or next year, so I'm not going to spend any time trying to guess the correct timing.
I've been trading for around 25 years, and there have always been very compelling and logical bear arguments. In my view, the vast majority of the time they are wrong, or the timing is too anticipatory, but they always sound very intelligent. Ironically, it is the bear arguments that create the conditions for us to "climb a wall of worry," and to me it looks like that is what is happening right now.