It seems to me that we have entered the final phase of this rally. One which could take us one step forward and two steps back.*
As it stands, it is hard to see much standing in the way of the market continuing its rally right now. Economic data is supportive, trend data is supportive, sentiment indicators are supportive, flow data is supportive, breadth is supportive, monetary policy is supportive. For those who haven't participated in the rally to date, I can't help but think that they are playing a dangerous game.
*The one step forward could be another 10%-15% move on the upside (ie. take us to 1140-1200), while the two steps back could be a 15%-20% correction on the downside (ie. 900-950).
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