I'm not a market timer, but have had money arrive with good timing this year. In the past few months, many of the EU debt tantrums have served as opportunities to place big investments on 3 of the major ETFs. Most of those bets ended up being well timed. Looking at the market today, those funds are up more than one should rationally expect.
While earnings season hasn't been the blood bath it could have been, there is no reason for stocks to be up. My conclusion is that these are not trading at bargain prices.
QQQ: trading at 67 but was recently in the low 60's
SPY: trading at 140 but was recently 130
DIA: trading at 133 but was recently 122.
Note that all of these funds are up about 20% since Jan/Feb, with no solid foundational improvements to the core economy. Companies are chugging along with skeleton crews of cheap labor and generally not hiring.
It's not clear what is giving investors this unfounded optimism, but it is not fundamentals. Whether it is the fact that things are looking good for Romney winning the election or that Europe has a plan for a plan for a plan which will never be implemented or just the lack of catastrophic news, I'm not comfortable.
In the past month, I've pulled two big holdings that I've had for years off of the table (AMZN and GOOG). Not simply because the market is artificially up, but because it is up enough that I have earned my required annual rate of return on the investment and am happy. I can't predict a pullback, but I can say with confidence, that once you've made your return, go home happy. Both sales have profits at long term capital gains rates.
I don't like having money on the side lines. But I dislike it less than buying stocks at artificially high prices.