Martin Hutchinson, writing today in Money Morning, presents a detailed argument that the current rally has been in the context of a secular bear market, which has yet to reach its ultimate bottom.
Hutchinson believes that valuations for stocks are far too high based on economic realities and compared to previous secular bear markets. He is less than optimistic that recovery can produce an earnings recovery to support current price levels.
One paragraph expresses the essence of his position:
"The most likely scenario for the United States is a recession, or near-recession, that lasts for a decade with the economy unsuccessfully struggling against the twin problems of surging inflation and a budget deficit that crowds out private capital investment. Either real interest rates will be high to combat inflation or inflation will rage out of control."
This is another article that is worth reading in its entirety.