NEW YORK (TheStreet) -- The markets right now are like a cigarette smoker who knows that smoking can kill them, but continue to light up anyway.

This phenomenon is known as "cognitive dissonance." The dictionary definition is "psychological conflict resulting from incongruous beliefs and attitudes held simultaneously." Hence, the smoker.

The U.S. equity markets are now in that same psychological state.

U.S. macroeconomic data has been soft lately, yet the equity markets will not sell off (the vigil for the long awaited 10% correction continues!).

As one of my colleagues from another institutional brokerage on the trading floor said the other day, "...I know the market should not be this high, and I'm concerned, but we have to stay in it. It doesn't make sense to exit as we know it will keep going up...." The path of least resistance; the path that adds to our collective cognitive dissonance.

Consider the following: Since the beginning of February, the majority of U.S. economic data have been continually underperforming to expectations. This is true for manufacturing, retail sales, corporate profits, wage growth and spending, inflation, and the various business surveys that are conducted to gauge sentiment. And, while the housing data (a good proxy for all U.S. data sets given its impact across the economic spectrum) have generally been favorable since 2011, they have been very choppy of late and housing is now an inconclusive indicator when it comes to assessing U.S. growth.

The one bright spot in the recent data, according to the pundits, has been the jobs picture (in spite of the really poor jobs report for March). They would have us believe that the economy is healthy because employment has been steadily increasing and more Americans are back to work. But even that claim is easily discounted upon inspection. Below the "headline" employment situation number we see the quality of jobs created belies the quantity. The adage that one job that pays $25 per hour is more economically impactful than 3 jobs that pay $10 per hour is, and always will be, true.

All of this makes market participants ill at ease, yet they plow more money into the market.

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The negative U.S. economic data surprises have been in abundance since February, but the markets have continued to march higher. The Russell 2000, set an all-time high on Tax Day. Not to be outdone, the S&P 500 is near its own all time high.

Either the market has entered a completely new paradigm, or something is seriously wrong. Could it be a bad case of cognitive dissonance? Perhaps.

 When does all it end and when does the market return to historical norms of analysis and evaluations?

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.