A:  Probably not, MarktWatch, if you keep putting headlines like this on page 1 every time the market takes a hiccup.  Click the graphic for the article.

It would be totally normal – even expected – for the market to get a good drubbing into the July time frame.  But much though I abhor the policy that has created and sustained this thing, said drubbing might only quiet down the interest rate hike talk and cement an even longer run for ZIRP.

We just don’t know.  Meanwhile, the market has not even decided yet on the answer to its‘manic melt up and termination or hard correction prior to new highs?’ question.  Here is the daily SOX (our leading index gauge) for perspective…

SOX looks toppy and indeed I intiated a short position against profitable NFTRH+ trades INTC and LSCC [ed. my mistake, LSCC is no longer profitable, but it is a play on a bigger picture setup.  Indeed, the lowest risk 'buy' level has not even been achieved as it is significantly lower, though I personally jumped the gun as sometimes is the case].  It [SOX] could take a breather here and perhaps even scare the bejeezus out of the come-lately bull momo’s.

But as the chart points out, it did something very similar in February (during the Ukraine mini hysteria) and ultimately held the decade old resistance breakout, ground up peoples’ nerves for a couple months and then launched higher.

So even if things do go bearish as is typical in July, what say we keep our moorings about us and not get carried away with assumptions in a market so thoroughly managed by policy makers.  As to Hulbert’s point about corporate profits reverting to the mean, let’s pull up one of my favorite charts.

Indeed, corporate profits are leveling off as the S&P 500 continues upward at the instigation of ZIRP policy.  That is actually a disturbing sign for an over bought, over loved stock market.  But it is nothing that has not happened before in this bull.

Bottom Line

1. Prepare for corrective activity.
2. Why not let said corrective activity (if it materializes) define itself rather than forcing assumptions upon it?