Stocks don’t give a damn at the moment, apart from the Nikkei, and even that just gives people better levels to go long. The freight train keeps on rolling.

The QE trade has seen the S&P up nearly 20% this year and 7.4% over the last six weeks. It’s also risen for five of those six.

As many have found, trying to pick a top has led to many burnt fingers, but it can’t go up forever, or can it?

Of the 391 companies that have reported Q2 earnings 68% have beaten expectations. 55% have reported revenue above estimates which is more than the last four quarters but below the historical average.

While on paper that looks good the reality is that the majority of good earnings have come on extreme cost cutting. While that is good for building a better base following the GFC there is still plenty of cutting to do. Twinned with a distinct lack of growth. Cost cutting will only get you so far.

So the ongoing issue is whether stock prices are still out of sync with fundamentals. The CEO’s would say not. But the next few quarters may say different. I still believe there will be a reality check for prices, but in all honesty I’ve given up trying to predict when that will be. If and when it does happen then that could be the perfect time to get in for the long haul and the rises we’ve seen could be just a drop in the ocean.

And right on queue here are the opening prices.