This the market climbing the wall of worry?

The Great Wall of ChinaLast week, I made the case for the market having entered the Subtle Warning/Disbelief phase of the sentiment cycle, so it was interesting to watch Rob Lutts, founder & CIO of Cabot Money Management on CNBC this morning say that this is a time to increase allocation to equities.
From a portfolio perspective, changing strategic asset allocation in response to market events is something that is just not done, while a tactical increase in allocation might be justified if the manager has good timing skills.
What I got out of the interview was that Lutts considers the market to be climbing the wall of worry, but I have to disagree. For me, the wall of worry is when price goes up while the fundamental outlook is weak (and keep surprising to the upside from quarter to quarter) much like 2005 and 2006.
2007, however, seems to be unfolding somewhat differently. At this moment, we have price down while fundamental outlook is still strong (and guidance seems to be going lower as earnings come in). Sounds more like the slippery Slope of Hope…