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One of Dave M's partners at Numetrix Capital, Paul Schatz, is filling in for Dave this morning. Here are Paul's latest thoughts on the "state of the markets."

Good morning. The Dow hit yet another all time high yesterday and there hasn't been a 10%+ correction in 35 months. When stocks opened sharply lower on July 10th, the bears came roaring out of hibernation calling for everything from a 10% correction to the end of the bull market. It was a sea of ugly red prices on my screen due to Portuguese bank worries, and weak China data. That decline didn't even last a full day. Nor did the decline based on the -2.9% GDP print or Yellen's previous press conference or a host of other headlines that were quickly absorbed.

I just cannot understand why more people are not excited about this market. It has truly been a bull market for the ages. The masses just keep hating and disavowing and predicting doom and gloom while the rest of us are smiling ear to ear for as long as we can. Bull markets do not end overnight and while this one continues to be old and wrinkly, it is generally healthy.

Because I am running out of ways to celebrate after all these years, I thought I would spend some time exposing some of the small cracks in the pavement.

What can the bears hang their hats on?

For now, the S&P 400 and Russell 2000 are seriously lagging the Dow, S&P and Nasdaq. High yield bonds, a major canary in the coal mine, have been lagging for almost a month. The NYSE advance/decline line has not confirmed the recent all time highs and has been lagging all month.

Is that enough to end the bull market? Hardly, but it could certainly spell market pullback at any given time. Have we had these types of warnings before? Yes, many, many times during this bull market with most common outcome being a short-term pullback.

Weakness remains a buying opportunity and the Dow should continue to power higher to 17,500, 18,000 and perhaps even higher before all is said and done.

Paul Schatz

Paul Schatz is President and Chief Investment Officer of Heritage Capital, LLC, in Woodbridge, CT. Paul developed and manages all eight of the firm's currently offered investment programs.

Turning to This Morning...

Just after yesterday's close, the U.S. and EU announced further sanctions against Russia in response to Russia's alleged support of separatists fighting in the Ukraine. Russian President Putin said sanctions would take U.S./Russia relations into a dead end and cause very serious damage. As a result, Russia's RTS stock market fell -3% Thursday, leaving it down -5.4% on the week. As one might expect, oil and gold are moving up and bond yields are down this morning. However, none of the moves are alarming at this stage. European bourses have declined on the new sanctions and U.S. futures are following suit, with the bears appearing to gain momentum in the last hour.

Pre-Game Indicators

Here are the Pre-Market indicators we review each morning before the opening bell...

Major Foreign Markets:

- Japan: -0.06%

- Hong Kong: -0.01%

- Shanghai: -0.55%

- London: -0.61%

- Germany: -0.80%

- France: -0.99%

- Italy: -1.35%

- Spain: -1.06%

Crude Oil Futures: +$1.25 to $102.45

Gold: +$2.40 at $1302.70

Dollar: lower against the yen, higher vs. euro and pound.

10-Year Bond Yield: Currently trading at 2.516%

Stock Futures Ahead of Open in U.S. (relative to fair value):

- S&P 500: -8.97

- Dow Jones Industrial Average: -49

- NASDAQ Composite: -21.00

Thought For The Day... Great things don't emanate from the comfort zone...

Positions in stocks mentioned: none

Source: Daily State Of The Markets: Indicators Suggest A Pullback Might Be Near, But...