Ever see "The Endless Summer"? It's a great documentary – two surfers travel to six continents, literally following the summer, on a "quest for the perfect wave."

Even if you haven't seen it, I bet you've wished for an endless summer.

One can't help but be reminded of, say, the stock market rally.

We're in the middle of a global pandemic, in an election year, at the end of summer, and the big question is: How long can this market – this endless rally – keep going?

Fresh and even all-time highs have become so commonplace as to become, well, commonplace. Non-events. Boring, even. Of course, the Dow's been a bit of a laggard, but it's getting there.

However, I'm looking at one thing that could make markets a lot more exciting…

The way I see it, here's what it'll take to keep it going – or stop it cold…

I Remember When…

Take Apple's recent all-time highs. The stock rose 8.2% in a week, propelling the Nasdaq Composite, of course, to higher highs. It propelled the S&P 500 to a record, too, since Apple's move accounted for 60% of that week's 0.7% upside move for the S&P 500.

I don't want to be the one that says "back in my day," but when I was first starting out 30 years ago – the high-flying Eighties – an 8.2% move in a stock took a week or a month, maybe even a quarter.

Now Apple, the biggest company in the world – worth more than $2 trillion – can move 8%, 10%, 15%, and more in a week. Hell, the biggest stocks on the market can move that much in a day.

If Apple were a car, we'd all have whiplash.

And that's precisely the problem, folks.

Today, the companies leading benchmarks (and everything else) higher are the FAAMG gang, Facebook Inc. (NASDAQ: FB), Apple Inc. (NASDAQ: AAPL), Amazon.com Inc. (NASDAQ: AMZN), Microsoft Inc. (NASDAQ: MSFT), and Google – or Alphabet Inc. (NASDAQ: GOOGL) if you prefer, but that ruins the FAANG thing, or FAAMG gang as it now stands.

If stocks can move up that fast (and we know they can) and they can propel benchmark averages up that much in a couple of days or a week… well, that's some black magic. In other words, highly dubious.

Valuations, in almost all terms, in almost all metrics, of the leadership stocks that've made this rally seem like an endless summer, are stretched. And I mean stretched. Thin and getting thinner.

You can draw direct parallels between stocks today – where just five stocks have led thousands of others higher – and the "irrational exuberance" that led to the Nasdaq Composite crashing 50% back in 2000.

That's not to say the companies are the same now as they were then; they're not. For one thing, in the late 1990s, investors were plowing a fortune into companies that had… little to show. No profits, no revenue, no products, no substance. They had the investing public's rapt attention, and that was pretty much it.

Today, the markets leaders have plenty – profits, revenue, leadership, products, substance, and attention – but it's still fundamentally irrational for so much money to pour into so few stocks.

In other words, it's irrational that five stocks are behind the greatest, shortest market rally in history, especially considering we're in the middle of a global pandemic and a recession that's going to leave millions of Americans out of work permanently.

This narrative isn't even about metrics. It's not about how price/earnings ratios for the FAAMG-Five are higher now than many of the tech stocks that crashed in 2000. Or more importantly, how the P/E on the S&P 500 is higher now than it was in 2000.

The story is that much higher multiples are justified, simply put, because earnings are growing like gangbusters.

It doesn't matter that earnings don't grow forever.

It doesn't matter that the last time five stocks made up 25% of the S&P 500 was back in 1970, and they were AT&T Inc. (NYSE: T), Exxon Mobil Corp. (NYSE: XOM), General Motors Co. (NYSE: GM), International Business Machines Corp. (NYSE: IBM), and – wait for it! – Eastman Kodak Co. (NYSE: KODK), any more than it matters that some of those companies have fallen from grace, their earnings decimated.

Bottom line, stock valuations are important.

And when the endless rally runs out, things will get "exciting" – wildly profitable – if you're on the right side of the trade, and downright brutal if you're not. I'll have some more to say about that in the coming weeks to get you ready. Right now, I'm on the beach, looking for the perfect wave to break.