What do the following have in common?

  • Hen's teeth

  • Campaign finance reform

  • Finding a needle in a haystack

  • A great pro-basketball game between two very good teams without thuggish play, chest-bumping (I mean really, chest-bumping for dunking on a breakaway? Will someone please put a stop to this?) or tongue wagging.

  • A major market index trading at more than four standard deviations above its 200-day moving average.

As you've probably guessed, the items above are so rare as to never occur. Well, almost never occur.

While I'm guessing we'll never see a hen's tooth, campaign finance reform, a needle in a haystack or a great pro-basketball game without the theatrics -- we

are

witnessing a major market index trading at four standard deviations above its 200-day moving average. What does that mean? Standard deviation is, according to the

Dictionary of Finance and Investment Terms

, the statistical measure of the degree to which an individual value tends to vary from the average.

In short, the greater the deviation from the norm, the rarer the event, and thus the greater the risk. According to

Statistics for Business and Economics

, the rule of thumb is that one standard deviation encompasses 68% of the historical possibilities in any given statistical study, while two standard deviations encompass 95% of these possibilities. The way I figure it, four standard deviations must include something like 99.99999999% of the possibilities.

If you're a fan of the market, do yourself a favor and print this chart of the

Nasdaq

and its 200-day moving average, because what is occurring now has never before happened to a major market index.

Please note that I am stressing

major market index

and not anything in Brazil, Greece, Russia or Turkey. I'm not making light of the action in these markets because owning

Telebras HOLDRs

(TBH)

makes you a lot of real money, too. I'm just concentrating on

G7

-type markets. I wish

CNBC

would bring in

Dick Vitale

to do some color commentary and give college hoops flavor to stocks: "Look at the Nasdaq shoot the three, fill the lane on a fastbreak and clean the glass. Awesome, babeeeee!"

As of the close of business on Wednesday, Dec. 29, 1999, the Nasdaq was a remarkable 42.7% above its 200-day moving average. How remarkable is this number? So remarkable that there is no historic precedent in G7-type markets for this kind of action. Not only are we living on the cusp of the "M" word (I promised myself I would not even say the M word, let alone type it), but we are witnessing a never-before event in G7 history in the form of the Nasdaq.

According to data I maintain (which includes the

Dow Jones Industrial Average

back to Jan. 2, 1900, the Nasdaq since 1978 and major international markets since the mid-1980s), no major market index has ever risen to a level greater than three standard deviations above its respective 200-day moving average. Here's the info:

By now, I guess you're wondering: "What the heck does this mean?"

What most folks are saying goes something like this:

Who are we to question the performance of these great stocks if they continue to rally day-in and day-out, a la

Qualcomm

(QCOM) - Get Report

? Besides, who cares what the heck history suggests; it's different now and those who don't recognize this are laying in the scrap heap with all of the other jokers who think, "Ooh, be careful, you could get a nosebleed."

But here's what I see, and what I think it means:

Like most indicators, momentum is no panacea, and the four dates referenced above did not occur simultaneously with the respective peaks in price (although Spain was mighty close). But it does put any advance into historical context, and I figure it's worth something to have an inkling about what has come before so as not to be totally surprised in the future. Santayana-esque right?

Anyway, much as we like to think that advances continue unabated, there are occasional disruptions -- and such disruptions occur when investors get careless. Tell the truth, with your portfolios going up as they have, don't you kind of think you're awesome? (See, I told ya!)

Jeff Bezos

, chairman and CEO of

Amazon

(AMZN) - Get Report

, as

Time's

Person of the Year

. Shoot, I love Amazon (not that I own any stock, but I love ordering from them). It's just that I wonder how can it get any better for the stock near term than having jiffy Jeff on the cover of

Time

?

Nasdaq unveiling the world's largest and most expensive video screen (eight stories high, costing $37 million) in Times Square. Go and check it out. It's obscene. I wonder just how many more bodies this tech orgy draws in? Prediction: In the next

King Kong

remake, the 10th wonder of the world will sit atop the screen. (Just in case you're wondering,

Chyna

of the

WWF

is the ninth wonder of the world.)

Microsoft's

(MSFT) - Get Report

capitalization ($606 billion) is nearly as great as the total amount of

Treasury

bonds outstanding. (As of the end of November, this figure was $644 billion!) Imagine that -- Microsoft is as big as the government. Who is the

Justice Department

kidding? The government break up Microsoft? Fuhgeddaboutit!

Putting all of this together tells me that there are no bears. And when there are no bears, I get cautious. How's this for a disclosure: I am not bearish and I don't hope that the Nasdaq gets killed. I just think it needs to take a rest. I mean really -- even God rested.

John Roque is the technical analyst at Arnhold & S. Bleichroeder, a New York-based investment brokerage firm specializing in Europe and the U.S., and a frequent guest on CNBC. At time of publication, Roque had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Roque appreciates your feedback at

jroque@thestreet.com.

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