Just as I suspected, through much of the last 2 quarters, investors were missing the biggest drivers of this market. It's happening again, but this time for different reasons. More on this later.

During the fourth quarter of 2008 and the first quarter 2009, the focus was on the supposed second worst recession of all time, which “justified” multi-year lows. I asserted that incredibly flawed rules (see my podcasts on key rules, policy fixes, and so on) were the primary causes, as they had been for all of 2008, and were exacerbated following the collapse of Bear Stearns. Is it too early to declare this case closed? Maybe. But let’s look at just 2 key facts.

1. By almost every statistical measure, we're in either the seventh or eighth worst recession. So this is nowhere even close to the second worst recession of all time -- and won't be. Yet stocks put in the second worst showing, and actually printed the worst rolling 10-year showing for large-company stocks as tracked by Ibbotson. This should at least make people question why.

2. Look at market advance since FASB relaxed FAS 157. This corresponds nearly to the day this news was first announced. The low may have preceded this by a few days, but there was also well-telegraphed talk that this would be fixed ahead of time. Basically, once the market knew FAS 157 was being neutered, the lows were locked. As I said many times, once we quit artificially destroying bank capital, we'll see all manner of positive benefits -- both real and perceived. 

The point here is, if you weren't charting, if you believed the doom-and-gloom rhetoric, and weren't focusing on the facts above (or at least acutely aware of them), most likely this incredibly great rally eluded you.

Why do I bring this up? Because I believe people are doing this again, and missing enormously important drivers in the market -- again.

1. This incessant argument about a bull rally in a bear market versus a new bull market is idiotic. Are market participants going to refuse to buy stocks again until we're “officially” in a bull market? If you do that, you're buying SPX at prices that won’t net you much, if any, in the way of gains.

2. The intense focus on the market in general is problematic;specifically, the idea that we must have a pullback, and shouldn't buy anything until we see one. Again, this seems sound unless the stocks you're watching to buy on a pullback don’t pull back as much as the market. Or they pull back so quickly that you don’t reverse hard before they can be purchased.