The financial markets have fallen into a "great extreme paradigm" similar to what occurred in 1987, Woody Dorsey, president of Market Semiotics tells Aaron Task on Tuesday's the Real Story podcast .

The rally may persist into summertime, but because the stock market's "spring break" in March proved short lived and shallow, the next decline is going to be of greater magnitude and longer duration, Dorsey says.

Dorsey's comments came on a day when the Dow Jones Industrial Average, Russell 2000, NYSE Composite and S&P MidCap Index finished at or just below all-time high levels. Such strength in stock proxies is one reason the Federal Reserve does not need to cut interest rates anytime soon, but also evidence the market doesn't really need a rate cut to rally, Task says.

Indeed, TheStreet.com's editor-at-large notes good economic news such as Tuesday's stronger-than-expected housing starts data and tame inflation news, including Tuesday's CPI report, have been pushing stocks higher in recent weeks, which counters the notion the market craves a rate cut.

The stock market also has been buoyed by stronger-than-expected earnings news, which was embodied Tuesday by Dow components Johnson & Johnson ( JNJ) and Coca-Cola ( KO). Those consumer giants, along with PepsiCo ( PEP), also have benefited from weakness in the dollar, but a falling greenback is another impediment to a Fed rate cut, Task says.

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