CNBC's Jim Cramer on Tuesday explained why it is happening, starting with the fact retailers haven't been as hurt by tariffs in the U.S.-China trade dispute as expected.
That is representative of the broader environment, Cramer said, in which there are more positives than negatives.
"The big guys in retail are doing just fine. Walmart, Target, Amazon, Costco simply haven't felt the pain," the "Mad Money" host said, adding that while the tariffs have hurt some retailers, the "sky is falling narrative" hasn't materialized.
An official agreement on a "phase one" trade deal hasn't materialized, either, but Cramer said the market "senses" that negotiations between President Donald Trump's administration and China are proceeding positively.
"And money managers do not want to be caught on the wrong side of the trade going into Thanksgiving weekend," Cramer said.
"Instead of worrying about whether they are too long, they're afraid of being too lean," he explained, "or worse, being short if Trump announced a big trade deal."
Cramer also pointed to the strong reaction to earnings reports from companies such as Burlington, Best Buy and Dick's Sporting Goods, noting that "when a company reports an upside surprise its stock is insanely rewarded."
While Dollar Tree was understandably hit after a miss, "what matters is that there are far fewer misses than hits," Cramer said.
So far, predictions that House Democrats' impeachment proceedings against Trump hurt the market have also missed the mark, Cramer said. In fact, it has resembled the reaction to Bill Clinton's impeachment, which saw the market move higher.
"We've known all along that these proceedings would only be stillborn — you'd need to get 20 Republicans in the Senate to vote against the President and so far not a single one has come out against him," Cramer said. "Rightly or wrongly, that's simply not on the table and the market senses the impotence of the Democratic efforts."
The other major political story right now — the Democratic primary — has also boosted the market as Sen. Elizabeth Warren, D-Mass., and other more liberal candidates lose momentum in the crowded field, Cramer said. Health-care stocks have rallied on the news that Warren, if elected, would delay pursuing a single-payer health-care system.
On the other hand, Cramer had warned against the quality of initial public offerings in 2019, arguing that they were the biggest threat to the bull market. So as IPOs have subsided, he said, "it makes sense that once they stop, we can go higher."
"Without all the new supply from IPOs, the corporate buybacks, they can finally work their magic, sopping up any excess selling, allowing stocks to rally," he said.
Moreover, the recent string of merger announcements have caused the stocks of companies doing the buying to rally, such as Novartis. Plus, employment figures remain robust and the months of September, October and most of November are in the rear-view mirror, Cramer said.
That means money managers are less likely to bow out of stocks, Cramer said.
While Cramer noted that there are obvious caveats, such as the possibility of an "errant tweet" from Trump or a surprisingly disappointing quarter, he feels there is more to like than not to like.
"No, the stock market hasn't gone crazy, it's just that there's still a lot more good than bad in this environment," he said. "That's why I keep thinking that we can climb through the end of the year, with occasional hiccups that could give those still on the sidelines one more chance to do some buying."