Just when it looked like the market might be running out of steam we had a big Merger Monday. Cash M&A is bullish for the market because as investors receive cash for the stock being taken over they put that cash to work in other stocks.
As long as credit spreads and interest rates stay relatively behaved we should continue to see more M&A and share repurchases, which should contain the downside. However, that does not mean we will not see corrections along the way. The S&P 500 has rallied a very quick 50 points from its lows after the Egypt scare and is overbought. I would not be surprised to see a pullback in the near term.