The Trigger

The problem bears face at the moment is one of timing. Economic tailwinds and improving sentiment look unsurmountable, at least until the Fed starts tightening. And given that most bears either don't expect the Fed to tighten, or don't see it happening until mid-2010 or later, it could be painful watching this juggenaunt from the sidelines.

That having been said, we have been on easy street for so long now that any vestiges of caution are castigated as something "quaint." As such, it is hard to know what might trigger a reversal in sentiment and equity fortunes. If we continue to rally into quarter end, then earnings could end up being a classic "buy the rumor sell the fact." But even with improving expectations about earnings, a positive outlook and strong momentum could blunt any retracement as folks "buy the dips."

Beyond upcoming earnings however, there are any number of amorphous economic, political and geopolitical factors that could arrest the rise. Unfortunately, in the absence of 20/20 foresight, the best you can do is monitor the conditions and look for any signs of a break in the weather.