Craft I am not saying the market cannot go higher but its hard to see the market being going sharply higher. Modestly higher yes, but sharply higher I just cannot see the fundamentals supporting it. If you look at p.e. ratios, Cyclically adjusted p.e. ratios, price to book ratios, etc for the Aussie market there is nothing to suggest its greatly undervalued (other than the earnings yield to bond yield comparison).
Interest rates in Australia are close to the bottom pf the cycle so there is not going to be much if any free kick from falling interest rates, the opposite is more likely in fact.
As for corporate earnings the resources companies will be faced with an oversupply of the major commodities for years to come. Sure there might be some cyclical upswings and downswings in resource earnings but I cannot see a major continued uptrend occurring there. Banks can increase their earnings modestly over time but given the high level of indebtedness in the Australian economy its hard to see how strong credit growth (and hence strong earnings growth) can be sustained. Modest credit growth is more likely. Also in the meantime Bank's are facing increased regulations and capital requirements that are impacting margins and earnings. As for Telco stocks Australia is a mature market and new technologies and companies will simply compete away the earnings of the outdated technologies/companies. Overall I don't see huge growth in aggregate Telco earnings. As for retail earnings most of the Australian retailers listed on the share-market are outdated dinosaurs that will slowly be crushed by companies like Amazon, Aldi, Expedia, etc.
Sure some of the other sectors like tourism, healthcare and education, etc might do well over time but given the heavy weighting of banks, miners and energy stocks in the index they will act as a drag limiting the upward momentum of the market.
For the record I am modestly bullish on the overall market as opposed to strongly bullish.