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Riddle: If all the bulls buy the dip, how many dips will there be?

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Navesh Chitrakar / Reuters

(Read caption) Bulls fight during the Maghesangranti festival at Talukachandani village near Kathmandu, Jan. 15. Wall Street's bulls are charging down the dips, burning every minor pullback into a new resurgence as they look for the bargain buys.

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IT'S OFFICIAL: Everyone's a bull, but everyone is expecting a correction "at some point". Isn't that helpful?

Diogenes the Cynic wandered about ancient Athens carrying a lantern on his quest to find a single honest man. Needless to say his search was ultimately fruitless. Were he to go looking for a single bull in this market moment who wasn't getting ready for a pullback to buy, he would be equally frustrated.

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The riddle I asked at the outset is a simple one: If we're all buying the dip, how many dips will there be?

I'm only half-joking of course as the market remains overbought and sentiment surveys are screaming - but we've seen this movie before and still have no confidence in when the reel ends.

What will be interesting to see is how many of these cautiously-optimistic bulls actually step up to buy that dip when it comes. History tells us that should we got through a spate of negative headlines (like the ones from this morning), a great swathe of the punditocracy will quickly drop any notion of positivity and switch over to the Comeuppance Camp. Remember all those newly-minted Double Dippers coming out of the woodwork in August of 2010 after a rough and tumble headline summer for stocks? They will be back.

In the meantime, the trend remains up. Decent S&P 500 support at 1260 is the eyeball level we're all focused on. Sentiment polls, while overheated, may merely be catching up after so much skepticism for so many months.

When the pause comes, we'll see who really buys it.

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