There are a number of reasons to be cautious or bearish on US equity stocks at this time. First, January is one of the months when stocks turn down, and there have been major downturns very early in January over the past 20 years.
Second, stocks are greatly extended, and SPX is >30% above its 200 day moving average, among many other measures.
Third, sentiment measured in many ways is quite bullishly set which is bearish. The 2CS hit 36 for an "all time low" in bearishness since the data became available to me in 1996/97.
Fourth, most economic news that impacts widespread market interest is very good but coming off a bit in a few places.
Fifth, four years is nearly always a pretty long bull move.
I am retired and can't risk taking big hits, so I have cut back further on equities as I have also cut back on overall bond duration. And I have some modestly sized hedges for stocks (SPXU--triple net short SPX); bond duration (EDV or zero coupon long 25-30 yr Treasurys) in case rates fall; and long gold (UGOLD and NUGT which are triple net long gold and gold stocks respectively) in case gold confirms a low as looks possible today. I don't have an options or futures account any longer, but I think of these hedges as being like options or leaps.
For the past two months I've been in Mexico, and I'm off in a few days on a six week honeymoon trip to SE Asia with my lovely bride of four months. I am taking along my three year old Sony notebook which weighs about a kilogram +/-. T Mobile has also given me a great travel gift with their splended new rates for US callers from 100 countries plus unlimited (except for speed) data. (It has worked perfectly in Mexico with intra-country and international calls and texting.) So my three year old HTC windows phone will do almost everything the computer will do except Java or Flash sites. I hope I won't be tempted to look at markets very much!!! In any case I'll be ~ 12 hours out of phase with North American markets.
Happy New Year and Perfect Health to everyone.