Quadruple witching resulted in a surge of trading volume with 2.8 billion shares of the S&P 500 stocks trading today.  Trading on the NYSE was up 42% and trading volume on NASDAQ increased 35%. This level of S&P trading volume has only been exceeded three times this year. SPX gained $3 to close at $1963 and RUT closed up $4 at $1188. Volatility rose a smidgeon with the VIX closing at 10.9%, probably the result of institutions hedging for the weekend.

There was no economic data of any significance reported today. I found one aspect of the FOMC announcement on Wednesday a little unusual. The committee said the economy is weakening a bit and lowered their GDP forecast to +2.3% for 2014. In light of the 1.5% decline in the first quarter, that forecast requires an average of quarterly growth rates over 3% - that strikes me as extremely optimistic. Perhaps Yellen is a politician after all.

The other disconnect from reality for the FOMC is on inflation. They don't think we have any inflation and have no concerns whatsoever. I'm not an economist, but I know I am paying more for food and gasoline. It doesn't feel like zero inflation to me. Perhaps it is similar to our fudging of the unemployment rate statistics. An unemployment rate of 6.3% really isn't too bad. During my lifetime, I have seen periods of solid economic growth with 6% unemployment. But this economy isn't healthy by any measure; just ask your neighbors and look at all of the empty commercial buildings. True unemployment is much higher than 6%.

SPX set another all-time high today. This bull market doesn't seem right to me. I just can't see the economic fundamentals to drive such exuberance. What worries me is this: history tells us that the higher and more frothy the market trades, the harder it falls. I would really prefer some sideways consolidation trading to cool things off a bit. But, you trade what you see, not what you think should be.

Have a great weekend.