Let's step back from the day to day action. It is now a poor daytrader's market as the volatility is dying out. From a fundamental view, equities are a sell. The global economy is slowing rapidly and this time, it doesn't look like the US will escape. Aside from Europe, you have China in a slow motion crash (just look at crude oil) and the upcoming fiscal cliff in the U.S.
It seems like investors are clinging on to QE3 hopes as a reason to buy stocks. Otherwise, there are no other compelling reasons. At 1350, the market is not cheap. I would say its expensive, considering the portion of the cycle that we're at. It is not like the late 70s or early 80s, when stocks were dirt cheap. We are nowhere near that valuation level. It makes us vulnerable to deep corrections and bear markets when the economy weakens. Just watching and eyeing a possible short on Friday or Monday.
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