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Bull will run as long this trend continues

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters

Buybacks and cash takeovers: the gift that keeps on giving to stocks.

Charles Biderman at TrimTabs called to tell me that February is continuing the trend of big buybacks and cash takeovers in the stock market.

That's bullish for stocks.

So far in February, the float of the U.S. stock market has shrunk by $92 billion. This is a significant contraction for a stock market with a market capitalization of $26.7 trillion ... about 3.4 percent.

There are indications this is shaping up to be another big year for buybacks and cash takeovers. Last year, the float shrink was $409 billion. For just the first two months of this year, we are at $124 billion.

Why are buybacks and cash takeovers so strong?

It's not for lack of earnings, which keep growing. Mostly, it's because CEOs have been reluctant to invest directly in expanding their businesses, likely because they don't see enough growth to justify the investment.

Read More

The 'no-growth' economy: Biderman

With no reason to increase capital expenditures, it makes sense to do a buyback or take over somebody for cash.

By the way, this float shrink is occurring even with $30 billion of new offerings this month (IPOs and secondaries), including $8 billion Wednesday.

What's it all mean? More money chasing fewer shares. A major boost for stocks continues.