Since October of 2011, the US. stock market has not only been resilient, it has repelled more water than Gore-Tex. The pullbacks in 2012, 2013 and the first eight months of 2014 have been unrepentant buying opportunities.

The current downpour that began in mid-September, however, has presented bears with more compelling reasons to sell. Market valuations are higher than they were three years ago. The global economy is weakening in ways that had not been present in earlier years. And, here in October 2014, the U.S. Federal Reserve is terminating its electronic money creation/bond-buying stimulus.

Investors should be able to recall that the quantitative easing bailouts (i.e., QE1, QE2, QE3) reinvigorated risk-taking at the bear market bottom of 2009, at the lows of the 16% correction in 2010 as well as at the depths of the 19%-plus decline in 2011. And without the prospect of the Fed stepping forward to bolster confidence – without clear evidence that chairwoman Janet Yellen plans to leave zero interest rate policy in place for a much longer time in 2015 – investor skittishness is likely to inflate dramatically. (They might like wages and household income to inflate to show the effectiveness of their policies, but the Federal Reserve has not seen that at any time in the recovery so far.)

Perma-bulls might be surprised to discover that purchasing stocks when they pull back 5% from all-time highs is “different” this time. Specifically, out-of-whack fundamental ratios (e.g., price-to-book, price-to-sales, price-to-earnings, etc.) inevitably return to historical norms, demonstrating that this time is NOT different. Small-cap U.S. stocks in the Russell 2000 hitting new 52-week lows show that this time is NOT different. And safety seekers craving long-term Treasuries – pushing them to new 52 week highs – prove that this time is NOT different. Simply put, perma-bulls may actually see that the stock market does not go up indefinitely.

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