A blogger has done an excellent exposition along the theme I have mentioned before - too many houses. We get new home sales today - probably pretty soft, but that will taken as encouragement for the markets. What currently passes for an investment theme is that:

1. Rate cuts always result in big rallies, so you need to be long going into a rate cut.
2. The economic data is so bad that the Fed will be forced to make another rate cut, probably several.
3. Therefore one must be long. And the more bad news the longer we get.

Another explanation I have heard is that the quant funds are driving the techs - the quants don’t look at fundamentals anymore, only momentum, so mo-mo breeds mo-mo.

Good  graphic on the housing bubble in the NY Times.