This blog post originally appeared on RealMoney Silver on July 22 at 7:51 a.m. EDT.Chairman Bernanke hawkish and inconsistent in his testimony yesterday, as he pushed back the thought of stimulus while at the same time saying that economic uncertainty was growing. Equally surprising was that he said that the Fed had not completed a review of their alternative stimulus options. In a perverse way, though, his economic warnings are bullish for the market, as he is typically among the last to recognize a problem (e.g., the subprime crisis). By the time he has, as he did with yesterday's recognition that "it is different this time," the markets are already in the advanced stages of accepting it. Markets are a discounting mechanism. Rearview observations and, at times, observations regarding current circumstances/fundamentals (especially at important turning points such as the time of the stock market's generational bottom in March 2009) are often irrelevant in predicting future prices. This was the core of my argument on CNBC's "Fast Money" last night, especially in my debate with my friend/buddy/pal, Brian Kelley. As I argued last night, the forward P/E for the S&P 500 (on a realistic corporate profits estimate) is now under 12x vs. an average over the past three decades of 15.5x and about 17x when inflation and interest rates are quiescent (as they are now). Yes, the upside to stocks is capped -- I am using only 13x to get to my 1,150-1,160 S&P target -- by the ambiguity of the current soft economic patch and by the emergence of several nontraditional headwinds (higher marginal tax rates, costly regulation, and federal, state and local imbalances). But the wide gap between historic multiples and today's valuation seems to argue that the concerns are known and discounted. The downside to stocks will be supported -- I am using 11x, which takes the S&P to the 1,025 level -- by the low probability of a double-dip and by growing evidence of a modest and shallow domestic economic expansion that is capable of sustaining itself.