The most common theme in earnings conference calls this quarter was the desire to raise prices. The recent rebound in commodity prices will not help ease these inflationary pressures. These pressures are occurring in a slowing economy. Imagine what would happen if the economy actually did well.
It is very difficult for me to see the upside in this market. Valuations are fair at best, if one accepts that profit margins will stay at record levels. If the economy does better we will likely have an inflation problem. If the economy slows corporate profits will likely suffer. It seems to me like the upside is a few percent, while the downside is sizable.
Please don't confuse my long term view with my short term bias. Even though I am negative longer term I am still leaning long and will likely remain so through tomorrow. That said, if my long term view were more positive I would likely be significantly longer.