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Economic uncertainties in Europe, Russia, China, and Japan, and geopolitics in Ukraine and the Middle East, driving short-term volatility in the U.S. equities market.

Commodities market cooling off due to slowing global demand; however, the whole demand story in China is not over yet and will continue to drive long-term GDP growth.

Midterm Congressional elections provides incentives for the government and the Fed to continue to improve general economic conditions in the U.S.

Despite relatively high PE, the market has not reached a state of hysteria and still has further room to grow.

It's hard to predict what will happen in the short-term given all the macroeconomic uncertainties in Europe, Russia, China, and Japan, and geopolitics in the Middle East and Ukraine. Further deterioration in these economies or war could trigger a global crash in the equities market. Barring further significant negative news, I am surprised by how resilient the US market has been, and I continue to believe that it could weather these interim storms in the short-term.

In today's near ZIRP environment, there's no real alternative investment other than the equities market. The commodities market has been on a bull run since 1999. According to Jim Rogers, commodities bulls typically run 15-23 years. With the slowing China demand and recent decrease in copper, it seems like this is the beginning of the end. However, I like to believe these declines are temporary corrections to a mid-/late-stage bull. The long-term demand from China is still intact, and the Chinese government won't let the economy go so easily. It's their chance to recapture global dominance after all (21st century belongs to China right?). Moreover, despite much stimulus efforts by the US and EU governments, the developed countries will at best see low single digits growth in GDP long-term. China's declining growth will continue to be where it's at.

As such, I see the hot money flow to the US equities market from commodities and European and Japanese markets in the short-term. Midterm elections provide further incentives to drive broader economic improvement in GDP, unemployment, PMI, etc., in a carefully managed interest rate and inflation to enable both corporate and personal spending. To that end, Yellen will do everything in her power to slowly raise interest rate to keep the economy humming. I think she won't raise rates until Q2 at the earliest. The US market will be choppy and will experience minor corrections in the short-term, but the bulls still have some legs to run.

I say this because the easy money from QE has been hitting the equities market and corporate coffers the past five years, but it's hardly hit Main Street. The rich are getting richer from their investments (wealth effect), but they are not spending much in the economy (you can only buy so much toothpaste). The middle class and the poor are being squeezed with stagnant or negative income growth and are just scrapping by. So they are barely spending. The latest move by FICO to change credit rating score (to leave out or discount medical debt) will boost the credit scores of many borrowers. Lending will become easier, and this, I think will to some extent stimulate more borrowing and personal spending. This will then prime the pump for corporate borrowing and spending (from their cash reserve). This, I think, is how QE finally trickles to Main Street. This increase in demand should drive the bull for the next 5-7 years. Minor corrections (10%-15%) will happen along the way, until finally the market becomes hysterical at the peak before the next major crash (30%-40%). We are nowhere near that level of hysteria right now, despite the current PE. It will go higher.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.