John Hussman at Hussman Funds gives a typically bearish take on the stock market in his weekly note to investors. The way he sees things, current market levels rely on various hopes to be fulfilled - the hope that credit difficulties have been solved and the hope that record profit margins can be sustained.
Meanwhile, the market climate is, in his words, "characterized by strenuously overbought conditions, strenuous overvaluation, overbullish sentiment, and hostile yield trends."
As for where we go from here, he notes that the stock market is actually more likely to rise than fall over the coming few week. But in terms of magnitude, it's a different story. He explains:
"If one was making a bet, and the payoff to the bet was simply whether the market will be up or down in the coming few weeks, it turns out that the raw probability of an advance in these conditions is greater than the raw probability of a decline. However, this does not reflect magnitudes. The probable gains are characterized by the likelihood of minor but successive marginal new highs. The potential downside risk is smaller in probability, but considerably larger in terms of magnitude."