Even the most fervent bears have to admit that there has been economic improvement. David Rosenberg actually sounded somewhat less grizzly in his January 4 Breakfast With Dave missive. But I want to remind readers that the economy is not the stock market. And even in bull markets there are steep corrections.
I believe the way this recovery has come about threatens to derail it as commodities and interest rates tick higher, but that is a discussion for another post. For now, let's assume that we are in a bull market. Bull markets are not straight up affairs and there are corrections within bull markets. Current levels of extreme bullishness have led to poor returns even in the context of bull markets.
The steady gains with little volatility in the market have been historic. I would note that these type of rallies tend to end with very swift and sudden corrections. Many of the risk on trades like Gold and the Euro have reversed in a very hard fashion. Equities could do the same, even in a bull market.