Mr. Market can be an emotional fellow at times, confusing and confounding the casual observer who tries to make sense out of market action that can appear nonsensical at times… right now, for instance. Indeed, the US stock market has been tumbling since its Dec. 5 peak – a slide that's unfolded amid an impressive run of US economic releases – the best, arguably, in several years. What gives? Judging by Mr. Market's reaction of late, there's danger on the horizon for the economy. The hard data, however, suggests otherwise. What the heck's going on? Is Mr. Market off his meds again? Or is there some logic buried in the current macro-market mashup?

One explanation is that the market is always looking ahead and so the rally in US equities through most of 2014 anticipated the good news in the US macro releases in recent weeks. In particular, three key economic indicators for November delivered uniformly strong results that topped expectations by a wide margin: private-sector payrolls, retail sales, and industrial production. This trio of strength suggests that America's modest economic recovery may be shifting into a higher gear. One can argue that Mr. Market saw it coming, and acted accordingly.

At the latest market peak (Dec. 5), the S&P 500's one-year return was a strong 16%, or roughly twice the historical average. Keep in mind that the rise over the past year, punctuated at times with violent corrections, was subject to quite a lot of doubt and criticism. Judging by the latest economic reports, however, it seems as though Mr. Market's sunny outlook has been validated.

But the market's relentless focus on the future means that the recent batch of numbers, although impressive, is old news. Mr. Market is clearly anxious about what may be lurking in the new year. As usual, the future's uncertain and so pricing the mystery of the morrow will likely suffer from a degree of real-time error and misguided speculation in the short term. The truth will out in the end, but the road to clarity, as usual, will be bumpy.