Glass ceiling?

The market's 80% rise from its 2009 March lows has been quite a story -- defying concensus criticism and attesting to the resilience of the US business climate. Granted, 1219 is still a far cry from the 1550 range of mid 2007.

So what does the past 20 months portend for the next 20? Is it possible that we're hitting a glass ceiling?

We're sitting at the year highs for the S&P (matching what was reached around April of this year), and 1219 is the resistence level to watch.

But also consider it this way: the market has rallied on inventory restocking, the return to some sense of normalcy, economic data that has proved positive as it was compared to absolute worst case data from 2008, strong corporate profitability, and excessive stimulus and quantitative easing that is actually focused at creating bubblish growth.

If you consider that all that is baked in the cake -- and that the economy is still only growing at 2% and likely to continue growing at such modest rates, then what does the market have left to hope for/process?

How about - rising commodity costs? higher gas prices hitting consumers? even if higher prices don't get passed onto consumers, corporate profitability will be squeezed. A weak dollar may improve exports and inflate people out of debt nominally but it may also lead to higher interest rates, which would only stifle housing and both consumer and national debt obligations.

The systemic debt problems of the country have not changed on iota. Yes, the financial system is once again stable, but the things that churn the US toward its annual 1.3 Trillion debt problem haven't been touched.

Meanwhile, you have state and local governments in a debt crunch and European countries such as Greece, Portugal and Ireland are returning to the national stage with talk of more help being needed.

Financial collapse has been saved and the markets love it. But actual debt servicing and restructuring has yet to happen -- and that MUST be dealt with for any healthy economic growth to occur.

The question becomes -- when will the markets deal with the debt concerns? Maybe when that's all they have left to focus on?