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How do you get a melt-up? You know that's what we are having. You see it in the way buyers are willing to pay above the offerings for stocks. You see it in how little buying power it takes to move a stock up.

I have two theories, and they work together. First, you shrink the supply. You take out the natural sellers who don't want to own stock anymore. And then you make demand bigger, by attracting more money. Both are happening now.

When we look back at this period, we are going to call it the post-capital phase of investing, where the major companies in America simply don't need any capital to run their businesses. Instead, they generate endless amounts of capital, or at least it seems to be the case.

If you think back five, 10, 20 or even 30 years ago, companies used the stock market to


capital to expand. Not anymore. If I didn't know any better, I would say that they use the stock market to buy back stock. That's the theme of quarter after quarter.

You have to listen to the conference calls or read the transcripts to know what I am talking about. Every one of them sounds almost the same: "We bought back 2% to 3% of the stock so far this year, and we want to buy more." How many companies simply said, "We think our stock is so cheap, we had to be aggressive"? You get anomalies like


(CMCSA) - Get Report

, long an issuer of stock, buying back billions of dollars' worth

as it goes up

; it's the best use of its capital because the future is so bright.

Now, none of that would matter -- and hasn't mattered all that much -- because we always seem to have money flowing out of our markets.

But as I said, when I

wrote that


12,000 is an important milestone, we're getting oodles of cash in from first-timers, from people who have put the bad days in the past, and from people who know that real estate has become a sucker's game.

The combination of money in and stock out is so incredible that you get this rally we are having, which, I might just say, is truly one for the record books. It simply is not remarked upon enough how unbelievably powerful, how unbelievably


this rally is. It is a monster big one, and it is happening for both supply and demand reasons. I have not seen anything like it since the mid-'90s, when you would have 401(k) money streaming in every week.

It's back.

And the combination, judging both from the money in numbers and the buybacks announced on these quarterly reports, is accelerating, not declining.

Which is why we are not done going higher.

Random musings:

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At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.

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