The bulls are proclaiming that all the merger activity and private equity buyouts are evidence that the market won't go down a bunch, with a Barclays/ABN merger being put forth today as yet another example.

But I would just like to point out that such monstrous deals can signal a top.  When AOL bought Time Warner, the uber-bulls - all of whom should have been fired - pointed to that tie-up as proof-positive that the Internet valuations were real and that the Talking Sock Puppets were not overvalued.  (Also, remember all the optical companies with no revenues that were being purchased by Cisco, Nortel, et. al., for $3 billion in 1999 and 2000.)

Of course, the uber-bulls were wrong.  Such mega-deals can be evidence of hubris and over-confidence.