Technical indicators suggest that the local market is overbought and ripe for a correction, but Wall Street's influence could overrule local factors.

While a zig-zag pattern is likely as investors succumb to short periods of doubt and profit-taking, stockmarkets appear to be set for an extended period of gains.

AMP Capital Investors head of investment strategy Shane Oliver said, ''While it's possible shares may be getting a bit ahead of themselves in the very short-term and hence may be due for a pause, it's worth noting that before Lehman Brothers blew up last September the US S&P 500 was around 1200 and the Australian sharemarket was around 5000, which is about 20 per cent above current levels.

''We remain of the view that shares have embarked on a cyclical upswing that has much further to go.''

Fundamental information about Australian company profits and new earnings forecasts look set to take a back seat, unless they fit neatly into the bullish mainstream. Ahead of the peak period of the Australian profit-reporting season, the market consensus is for a 23 per cent fall in earnings per share over the 2008-09 financial year. That would make it the worst year for overall profits since 1990-91, when earnings per share fell 26per cent.

For more, pick up a copy of today's Canberra Times