Several traders that I interacted with today were not able to participate on the long side despite the fact that the stock market was strong throughout the day. When they explained their selling bias, they said things like, "I just don't believe we should be trading up here" and "There's no way we are going higher; the economy is in terrible shape."
Mixing the mindset of trader and investor is hazardous to your wealth. As an investor, I can tell you that I remain very conservatively positioned with my retirement assets. I believe that we entered a secular bear market in 2000, and I believe that bear market has years--not months--to run. Just as we hit bottom in 1932 and did not see a full fledged bull market until the late 1940s, and just as we hit bottom in 1974 and did not see a fresh bull until 1982, we could muddle around for a considerable period in a long-term bottoming process.
And that's generously assuming that we made a price low for the secular bear in March!
All of that, however, is irrelevant to what I think about the stock market *today*. If I see that there is no bearish bias over the next several days and that indicators are strengthening over a three-day period, I am going to look for reasons to buy in today's session if I detect signs of strength. Trading is about exploiting supply and demand during short-term intervals; it is not investing.
You could tell me that President Obama is saddling this country with outrageous debt; you could decry the greed of banks; you could question the ability of the consumer to sustain a durable economic recovery; you could question the fundamentals of the U.S. dollar: for the most part, I would agree with you. But those have nothing to do with whether institutional participants, right here and right now, are purchasing, selling, or avoiding equities.
There's a time for politics, and there's a time for economics. Just not when you're trading the day timeframe.