First of all, I agree with John Hussman that the US economy appears to be deteriorating (and his writes much more eloquently than I do). So far, the stock market hasn't paid much attention to those risks and is in fact probing new highs as I write this.
However, the inflection point may be arriving. Bloomberg reports that the Street is now cutting S&P 500 earnings estimates:
For the first time in more than a year analysts are cutting their forecasts for Standard & Poor’s 500 Index earnings, jeopardizing gains from the biggest September rally since World War II.Moreover, the number of new highs aren't expanding despite the strength in the averages:
Estimates for S&P 500 companies’ combined 2011 profit fell as low as $95.17 last month from an August high of $96.16 and posted the first quarterly reduction since the three months ended June 2009, according to more than 8,500 analyst forecasts tracked by Bloomberg. The revision came as the benchmark gauge for U.S. equities rose 8.8 percent last month, the largest September advance since 1939.
Just as the bulls appear to be taking control, I am put in the position of the robot in the old TV series Lost in Space as I warn: "Danger! Will Robinson! Danger!"