Risk assets around the globe are rising this morning as managers jockey for end of month positioning. If the turn of the month turns out to be a strong period than the market will be quite overbought by early to the middle of next week and seasonality will no longer be positive. The economy is still deteriorating but that has been the case for a while and is something to keep in mind but not the most important factor in the short term.
The bulls have a few positive factors in their favor that make me hesitant on the short side. Hedge funds de-risked during May and June. They probably have reversed that position somewhat but their positioning is still on the conservative side and re-risking could drive another leg higher. Sentiment is still on the sour side in general. Additionally, it looks like we will see a $20 billion Genzyme takeover in the weeks ahead and share repurchase activity has been solid. All in all there are both bullish and bearish arguments to be made and I still don't see an easy trade.