I think that the key/crucial times at which the markets were going to collapse in a major way since the correction have just about passed for now. Perhaps in the first week of november there may be some risks, but it looks, tom me, like there is more upside to come.
Sure we have the issue with crude rising (the rise this year to-date is around 80% - depending on where you set your reference point on the January candle - either way, its a worry), gold is rising (but is still relatively undervalued), the US$ is tumbling, and inflation is on the up (but the latter is nowhere near the pre-1987 levels yet). The Aussie$ is on a rise that will hurt OZ co's and individual debt in OZ is at danger point. Oh and there is the sub-prime mess that was the one spook that frazzled me a couple of months back.
On the flip side there is a lot of evidence to suggest that this bull has more legs in it. Ignoring China demand and commodities since every lemming knows about that, corproate debt levels are around 70% compared to 100%+ pre-1987. The average PE is still well below 1987 and 2000 crash levels, plus balance sheets are stronger (and I've touched on the relative inflation).
In the five year bull run to 1987 the XAO exhibited a 5-fold increase. In the 5 years to now there has only been a 2.5-fold increase. (Anyone, please feel free to draw comparisons with other lead-up runs to crashes, because I would like to know more about these - althoug I am aware the probability of this post getting a reply is minimal).
Another this that is different this time is (and there has been plenty of reference to this here as deep pockets) is the superannuation and managed fund industries are bigger than ever and throwing their weight into the mix. Funds are also incoming to the oz market from the OZ federal gov's future fund.
So while there is alot of comparison being drawn, and yes when the pullback occurs it may mirror 1987 or whatever, perahaps that comparison needs to be drawn on other levels.
In terms of something cataclysmic that may happen at the end of the bull, I still favour and 1997/1998 style fizz.
In the mean time, the likely US rate drop this week will likely produce another catalyst that will send the markets further north. I believe this is supported by what appears to the be cup and handle formations in the US and UK indices that are in their final stages of formation. This usually means strong advances.
(20min delay)