The article's argument is not one of fundamental analysis, but on the technical side.
The writer argues that the 2007 market top was carried by only a few large stocks, while many smaller stocks were already in a decline at that very top. He says that in contrast the current stock rise is more broad-based, with many stocks advancing. In his view, that means more people will be flocking to buy stocks, and the price advance will continue based on supply and demand.
I prefer to see bullish arguments based on fundamentals, so that the stock gains will have support long-term. I am not a trader, and would rather hold than jumping in/out of the market. On the other hand, there has indeed been evidence that people are now flocking to stocks as they bail out of bonds. An article on Bloomberg has the following excerpts.
"Stock funds won $172 billion in the year’s first 10 months, the largest amount since they got $272 billion in all of 2000, according to Morningstar Inc. (MORN) estimates.
The move marks a reversal from the four years through 2012, when investors put $1 trillion into fixed income as the financial crisis drove many to redeem from stocks and miss out as the Standard & Poor’s 500 Index almost tripled from its low.
Intermediate-term bond funds, a category often used for primary fixed-income holdings, declined 0.9 percent in 2013 through Nov. 19, according to Chicago-based Morningstar. Fixed-income funds had net redemptions of $11.2 billion in this year’s first 10 months, the firm estimated."
If one compares the $172B inflow to stocks to the $11.2B outflow from bond funds, and assumes these numbers are correct, then perhaps people are putting cash to work? What happens to the $1 trillion that went into fixed-income as the article says? Will there be more money coming out of there?
See: Stock Funds Lure Most Cash in 13 Years as Market Rallies - Bloomberg
Anyway, this Bloomberg article notes that not everyone thinks this stock inflow is a good sign, and that we can have a big correction anytime. Oh well!
PS. So far, all 10 sectors of the US markets have rallied, from the healthcare sector at the top to the ones at bottom like utilities and telecoms. The rally is indeed broad-based.
PPS. The -0.9% decline in intermediate-term bond funds as mentioned in the above article is mild, compared to long-term Treasuries. Vanguard MF VUSTX is down -12%YTD while its ETF EDV is down -20%YTD as of 11/21/2013.