Whatever is going on in the daily stock market, you can't call it "price discovery" or even remotely rational.

In fact, it amounts to grinding in harms' way and measures the degree to which the Fed and other central banks have turned the Wall Street casino into a giant litter of sick puppies who are bent on rolling the dice until they self-destruct.

Even MarketWatch has noted that the S&P 500 has climbed above 2100 on more than 30 occasions during the last 18 months, but has retreated each and every time.

So buying the dips in that context is based on eyes wide shut speculation; it essentially implies there is no material downside, and that one of these days the market will bust loose from its 2130 top of May 2015 and soar to spectacular new highs.

Source: FactSet

Now exactly how could that possibly happen? There is no macroeconomic or profits upsurge in sight, yet the market is already trading at 24X reported S&P 500 earnings. And even a modest 5% gain from the old May 2015 high would take valuations to a hideous 26X.