Bullish sentiment is slowly, but surely making a comeback according to the latest data from AAII and Investor’s Intelligence. Via AAII:

Bullish sentiment rose 7.8 percentage points to 40.0% in the latest AAII Sentiment Survey. The percentage of individual investors who expect stocks to rise over the next six months is at a six-week high. The historical average is 39%.

In today's potentially ultra-slow-growth "New Normal" economy, old stock market multiples do not apply.

In fact, investors who rely on long-held rules about Price/Earnings (P/E) ratios when they buy and sell stocks are risking a pretty big "haircut:" They may be overvaluing some of their stocks - and the stock market in general - by 17% to 20%.

Recently Barrons asked the question: “Do you believe in technicals or fundamentals?” The article pointed out that while the technical picture looks bullish, the fundamentals remain weak and caution is warranted.

I agree that the technical picture looks quite positive as the bulls seem to have regained their footing. On the other hand, respected investors and analysts such as John Hussman to David Rosenberg have been warning about the deteriorating economic backdrop.