Pequot Strategist, general elder statesman and wise dude Byron Wein takes, as poker players like to say, a very strange line here, even as we just finished demolising the November lows to the downside:
"I remain one of the few optimists who believe the market will begin to anticipate a recovery in the economy sometime in the second half of this year. I am prepared for the fundamental backdrop for equities to get worse before it gets better. I expect earnings will be disappointing and company guidance will be revised downward and more layoffs and bankruptcies will take place. However, once the positive effects of this enormous stimulus program begin to be seen, I believe the stock market will have already anticipated the good news. Even if the fundamentals only show improvement in 2010 we could see a better stock market later this year."
One could say that disagreeing with the above construct carries with it significant risk from these levels - lots of stocks are cheap. Sentiment is so bad that it could get better. I, for one, would be happy if we end the year at the level we're at now but who knows.