Another week has gone by with yet another all-time high.  There has been no material change in either the long term outlook for equities or in FED policy, so one can be forgiven for being dumbfounded by the relentless march higher. 

However, as I’ve said often during the past 12 months, the current move cannot be quantified. This is the tail-end of one of the strongest bull markets in history, and the forces at play are far too powerful and extreme to be rationalized with traditional metrics.  The current move entered into a runaway phase long ago, and the final speculative blow-off is driving non-believers absolutely insane.

By non-believers, I refer to those who fail to understand that markets are often irrational.  And that during the end of large cyclical moves, assets can be divorced from underlying fundamentals and can even behave in ways that almost seem counter to them.  These extreme moves are self-fulfilling and relentless, and can cause even rational observers to raise the question of whether this time may be different.  As humans, we quickly forget that all things in life, and especially in financial markets, move in distinct Cycles.  How else is it possible to explain the FED missing some of the largest financial storms in history?