As we concluded here last week, there was no compelling evidence that the selloff was anything more than a normal temporary pullback. The past week's bounce in most global indexes suggests that most felt likewise.
I'm not saying stocks couldn't sell off, they could. I just don't see any new reason why that would happen now. There's no compelling reason for a new leg higher, but there also isn't a reason for a selloff either. Sure, with stocks so high any number of factors could spark a normal 10%-15% pullback. But beyond that? What?
At this point, the market needs more than just hopes.
As we move into April, it's important to look at the stock market's long history of making most of its gains each year in a favorable 'season' of November to April, while most of its corrections and bear market down-legs take place in an unfavorable season from May to October.
Additionally, the historical evidence that clearly shows seasonal investing substantially outperforms the market over the long term (while taking only 50% of market risk) includes those individual years when it did not outperform.
The big question for this year is whether it will be three straight years that seasonality does not 'work'. Or will it more likely resemble 2011 (or worse), when massive QE stimulus did not prevent a 20% market plunge in the unfavorable season. (The only thing that prevented it from becoming worse in 2011 was that the Bernanke Fed rushed in to double the QE from $40 billion a month to $85 billion a month).