The most likely scenario in my mind is this bull will continue to run for the short term, although the summer is often pretty stagnant. The fundamentals look sound, especially if you project earnings to continue to grow at the rate they have been in recent years (which I don’t, but projecting is a dicey buisiness).
A slowing economy will hit earnings sooner or later, which will eventually end this bull run. Once people stop expecting earnings to keep going up, they start valuing stocks differently. Putting an exact timepoint on it is impossible, but I don’t think this next quarter’s earnings will be bad enough to spook the horses.
At this point in the cycle the most prudent course of action seems to be defensive, “boring” stocks along with some cash and foreign equities that are less tied to the US economy. It’s early to be shorting the market as a whole, although there are always overheated individual stocks that could be worth a look.
