While a few high-profile IPOs like Seaworld Entertainment (SEAS) and Norwegian Cruise Lines (NCLH) have caught the investing public's attention this year, the real action has been in secondary offerings. Why? Low interest rates and a stock market that's up 14 percent this year has made this one of the best markets in years to float stock...and debt.

Year to date, there's been 302 secondaries with a value of $81.9 billion, according to DealLogic. That's the highest number of secondaries year-to-date since 1998, and the highest dollar value since 2009.

The secondary charge has been led by Real Estate and Property companies, which have raised roughly one-quarter of the total amount. That makes sense: real estate is one of the bright spots of the U.S. economy...real estate companies are raising stock to fix up their balance sheets and to raise cash for acquisitions. Companies that have floated secondaries include Realogy (RLGY), which owns the Century 21 and Coldwell Banker real estate franchise.

Other sectors with heavy secondary offerings include Oil & Gas (12 percent of the total), Utility & Energy (9.9 percent), and Healthcare (8.8 percent).

Even retailers like Michael Kors (KORS) have gotten into the act, with at $1.5 billion secondary in February.

This is not just a stock market phenomenon: with rates at historic lows, both high-grade and junk bond issuance has also soared, led by Apple's (AAPL) $17 billion offering.

The business of announcing secondaries can be tricky, since putting additional stock on the market can sometimes depress the share price. But with a steadily rising stock market, there are few cases where new stock has pushed prices down. In some cases, it can help.

Case in point: Restoration Hardware (RH), which priced a secondary May 15th at $50; the stock had been $40 on the 10th, when they updated their guidance; it popped again when the secondary was announced on the 13th.

Going into Friday, the S&P 500 is down one percent for the week after being up four weeks in a row. So far, the declines we have seen this year — in February and April — have been on the order of three percent. In other words, these sell-offs have been brief and shallow.

Legitimate or not? NYSE lets stand trades in utilities American Electric Power (AEP) and NextEra Energy (NEE), but removes many trades from the tape.

The NYSE has let stand all trades in AEP and NEE. But in an additional decision that is raising eyebrows, it has decided to remove all trades from the tape that were roughly three to four percent below the opening price.

To recap: AEP opened at $48.18, just below the prior close, but quickly traded down on several exchanges to as low as $22.28.

NEE opened at $78.62, also just below the prior close, but quickly traded down to as low as $30.37.

NYSE officials quickly met to review whether any of those trades should be busted under the clearly erroneous trade rule, which allows trades to be busted if there is a mistake in the order. The rule is very clear: "A Clearly Erroneous Execution ("CEE") is an execution with an obvious error in any term, such as price, number of shares or other unit of trading, or identification of the security."

Was there an error made? The NYSE determined that the trades were based on market orders, limit orders, and stops that drove pricing down. In other words, legitimate orders.

The trades stand. Even the ones for AEP at $22.28 and NEE at $30.37.

OK, fair enough. They were legitimate orders, and the trades stand. Here's something that bugs me: the NYSE also said that all trades in AEP at or below $46.03 between 09:30:00 a.m. and 09:31:00 a.m. and all trades in NEE at or below $76.19 between 09:30:00 a.m. and 09:31:00 a.m. will be marked with an Aberrant Report Indicator.

What's that? Let the NYSE explain: "The NYSE notes that executions at these prices are still valid trades, but they will be excluded from the high and low data disseminated by the Consolidated Tape Association."

Huh? You mean the trades are still valid but the worst ones will never appear on the tape? That's exactly what it means.

Why? I am going to speculate: imagine being AEP. You're a dull utility. Investors buy your stock for yield and stability. Suddenly the whole world knows you had a trade at $22 and change, when your stocks was $48. It might make some think you're too volatile to own. Screaming executives.

The NYSE is now caught between a rock and a hard place. They have a stupid circuit breaker rule that does not allow circuit breakers to be used at the open (see below) that was forced on them and all the exchanges by the SEC, so it's not really their fault. But they have to mollify a customer--in this case, AEP and NEE. What to do?

Let the trades stand, but declare that the worst ones are "aberrant." No one sees them.

Sorry, I understand the dilemma, but this doesn't smell entirely right. Is it a legitimate trade or not? If it is, it shouldn't be hidden.

The companies are not happy. Moray Dewhurst, Vice Chairman and Chief Financial Officer, NextEra Energy, Inc., sent in the following statement to CNBC: "We are continuing to try to understand exactly what happened in the first few minutes of trading in our stock this morning. This is naturally a concern for all our shareholders and potential shareholders. This type of market behavior is not what we would expect from a well-functioning and well-regulated exchange."

Move on: how did this happen in the first place? There are two problems:

First, there is no circuit breaker protection for individual stocks between 9:30-9:45 a.m. ET and 3:30-4:00 p.m. ET. In other words, right after the open and right before the close.

During the rest of the day, the new circuit breakers (known as Limit Up, Limit Down) put trading halts on stocks that drop more than five percent in the prior five minutes.

Circuit breakers with full protection for the entire day (9:30-4:00) comes into effect on August fifth.

August fifth? That is no consolation. There is a major rebalancing at the close next week, and traders are nervous that could cause problems.

Don't blame the NYSE nor the NASDAQ: this was an SEC ruling. ALL the exchanges objected to not having circuit breakers in effect at the open or the close, but they were overruled by the SEC. Why? Not clear, but the SEC probably felt that they were unsure how well the new circuit breakers (which came into effect a few months ago) would work in the real world and wanted to avoid having them during the two most volatile times of the day.

That was wrong thinking: the circuit breakers have worked well. If they were in effect at the open--or the old NYSE circuit breakers were in effect--the problems with AEP and NEE would not have happened.

Second, books are thin. The opens are notoriously thin; there is very little stock to buy or sell on any of the order books.

Why did it happen with these two stocks? It's not clear, but it's likely the mix of market orders on top of unusually thin books. Remember: unless traders put a stop order in, a market order can quickly deteriorate.

This happened last week in Anadarko Petroleum (APC), when three large sell orders hit the tape in the last minute, causing APC to go from $90 to some trades that were executed at a penny. The NYSE then stepped in under the clearly erroneous trade rule and canceled all trades below $85.76, which was several percent below the last trade. So those trades were deemed a mistake.

Have two Pandora's Boxes been opened? Fed Chairman Ben Bernanke may have opened the first one. No matter that it is highly unlikely economic data will come in showing sufficient strong and sustained growth to justify tapering bond purchases any time soon — markets see it differently.

The bond market is wound so tight that even raising the remote possibility of ending tapering of bond purchases has thrown prices into a tizzy.

Traders chase both sides of Fed debate.

Is this a signature day for the markets? Not clear yet, but a couple data points: 1) heavy volume, 2) spike in volatility, and 3) a key paragraph from the FOMC Minutes:

"A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome."

Uh-oh...they mentioned a June meeting! It's over! Aargh!

Hold on: "views differed about what evidence would be necessary and the likelihood of that outcome."

They can't even agree on what evidence would be sufficient for them to begin tapering! With the voting members heavily weighted toward doves, does anyone think the Fed is going to taper in June? Anyone? I didn't think so.

In my informal, unscientific surveys of traders, only about 25 percent of the traders I talk to believe the Fed might begin tapering by September; the majority believe they will not do so until 2014.

They could be wrong, but unless we see Nonfarm Payrolls over, say, 250,000 for the next three months, I too think it is unlikely the Fed starts tapering in the next few months.

Instead of asking, "Why did we drop midday?," let me turn this around and ask, "Why did the Dow move up 150 points right after the Bernanke testimony--why were we up in the first place, given that Bernanke was very balanced?"

The answer is, traders are chasing both sides of the story.

The guys who believe the economy is weak--and that the Fed will not move before 2014--point to comments from the Fed minutes like, "Many on FOMC Wanted to Wait for Stronger Data Before Tapering," or "Many on FOMC Said More Progress Needed Before Slowing QE Pace."

Note the phrase, "many."

But many are now trying to position themselves hawkishly and are trying to drag the market in their direction.

Finally, several have asked why the market sold off at 1:00 p.m. ET--an hour before the Fed minutes. Silly theories that "someone knew something" aside (please), news of a police officer being killed--and hacked to death--in London--along with disturbing video of one of the apparent killers with blood-soaked hands--may have been a factor in the markets drop.

Traders overreact to Federal Reserve Chairman Ben Bernanke's comments. Mr. Bernanke, in his Q and A, essentially reiterated what New York Fed President William Dudley said yesterday: that any change in the flow of bond purchases will depend on the incoming data.

A question about whether the Fed might reduce bond purchases before Labor Day elicited the same reply: the Fed could reduce bond purchases in the next few meetings if the data supported it.

But stocks immediately came off their highs, bonds dropped on the comment. This seems to have been interpreted to mean there was some kind of imminent end to purchases was occurring.

Dudley warned yesterday that there was a real risk of the markets overreacting to any talk of tightening. Here is a good example of this.

Dudley also said it will take three or four months before the Fed will know if the economy is strong enough for it to begin tapering its purchases of bonds.

Most traders believe that the chances of June tapering is zero, with only a minority that something will happen in the July 30-31 meeting. Some believe the chances are higher for the September meeting, but most still think the data will likely remain weak and the Fed will not move until 2014.

If you don't think this is hard to parse, consider the two different headlines, this from Barron's: "Bernanke Doesn't Rule Out Fed Taper In the Next Few Months"; and this one at the same time from Reuters: "Bernanke Offers No Hint of Pullback in Fed Stimulus." Finally, this from AP: "Stocks Surge as Bernanke Retains Dovish Tone".

Why is this hysterical parsing happening? Because markets are now so dependent on central bank support, because organic growth is so lackluster, that any hint of premature withdraw of stimulus creates a knee-jerk reaction.

Unfortunately, we're going to have to get used to this. We're all parsing commas now, for every Fed official, into the foreseeable future.

Bernanke pre-empted by Dudley: Will he throw it back into Congress' lap?

Bernanke, in his written testimony, confirmed what Dudley and others had already said: That premature tightening of monetary policy could stall the recovery.

But how about this: How about a more aggressive Bernanke, one who insists that the Fed has done all it can, who turns the tables on Congress and insist that lawmakers begin addressing the fiscal issues?

Bernanke hinted at this in his written testimony, but let's hope he is more assertive in the Q&A: "To promote economic growth and stability in the longer term, it will be essential for fiscal policymakers to put the federal budget on a sustainable long-run path."

It's no secret most of the Street has been trying to anticipate--and trade ahead of--the anticipated Fed "tapering" of bond purchases.

Separate speeches today from the New York Fed's William Dudley and the St. Louis Fed's James Bullard have thrown some hot water on that thesis.

Mr. Dudley came right out and said that the Fed might adjust the pace of bond purchases up OR down; that the outlook was uncertain, and that he wasn't sure what way the Fed would be leaning.

Traders seem desperate to spin every Federal Reserve pronouncement hawkishly, so everyone will be listening for clues about possible tapering of quantitative easing when two Fed presidents speak later on Tuesday.

St. Louis Fed President James Bullard plans to speak at 11:30 a.m. EDT from Frankfurt, and New York Fed President William Dudley, who is a dove like Fed Chairman Ben Bernanke, will speak at 1 p.m. EDT at the Japan Society in New York.

Other than that, markets are likely to be quiet ahead of Bernanke's testimony on Wednesday. There will be the usual questions: When will the Fed start to taper its bond purchases? What would prompt the Fed to increase its purchases? Are the past few jobs reports really a "substantial improvement" in conditions?

The big event this week is Wednesday, when U.S. Federal Reserve Chair Ben Bernanke testifies in front of the Joint Economic Committee, while the Fed releases the FOMC minutes to the April 30 and May 1 meeting.

The markets were all aflutter last week as John Williams from the San Francisco Fed (a dove) indicated he wanted to taper off purchases sooner rather than later.

But Bernanke is likely to reiterate exactly what he said at the May 1 meeting: that they are "prepared to increase or reduce" their bond purchases as the labor markets or inflation outlook changes.

(Read more: Bulls Will Be Driving Market, but Bernanke Is Steering)