Santoli: 'Democratic' market could grind higher

A construction worker using an angle grinder to cut a metal pipe.
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A construction worker using an angle grinder to cut a metal pipe.

It's now intuitive and logical to say the stock market should pause or pull back soon, right?

Stocks have hustled across six lanes of traffic to rise nearly 14 percent in two months, and they should be winded. More than 9 in 10 stocks are trading above its 50-day average. The market didn't get any cheaper by standard measures this year, as corporate profits have slipped. Equities stand to be tested by a faltering oil rally. Company insiders have rushed to hit the market's bid, with the ratio of stock sales to buys surging to 36 to 1 in the latest week from 5 to 1 in February, according to Thomson Reuters.

I could argue that the broad plausibility of the idea the market has come too far, too fast is the biggest reason that the market could confound common logic and keep grinding higher with low-drama resolve. Most investors have still not bought in emotionally to this rally, judging by sober survey results and muted fund flows.

But let's suppose the surface indicators of a coming retreat prove accurate.

What might the character of this pullback be, and would it offer a buying opportunity or a graceful exit from the market?