The perennial bears tell us the stock market's about to collapse under the weight of over-optimism, while the perennial bulls offer up blue skies as far as the eye can see. Let's you and I be perennially neither and simply assess the data we have at our disposal.
As regular readers know, over the years I've found Newton's First Law of Motion to be most instructive in terms of my views on the prevailing state of the market, as well as our sector/regional allocation decisions. That is:
An object in motion stays in motion until acted upon by an external force...In that the potential external forces that would act upon a moving market are far too many to know, let alone assemble and predict -- rendering the skill discussed in paragraph 1 unattainable -- far better to utilize our tools to identify trends, rather than try and predict the unpredictable -- rather than become the "some traders" Corey Rosembloom, characterizes in his instructive (for market technicians) book The Complete Trading Course,
... for every correctly called market top or bottom, there are dozens if not hundreds of inaccurate calls of tops or bottoms that lie scattered in the graveyard of market analysis and in personal trading accounts. Some traders destroy their accounts by stubbornly fighting a trend, clinging to their opinions of what the market should be doing as opposed to what the market is actually doing . Traders lose money when they try to force their will on a market, and traders who fight prevailing trends can suffer major losses as they trade against the probabilities from the onset.In other words:
... the trend , once established, has greater odds of continuing than of reversing.