1. The Dow Jones Average is a broad-based index of 30 large cap stocks. It took five years to get back to pre-crash highs.

2. The Russell 2000 is a broad-based index of 2000 public companies. On 11/22/10 it got back to pre-crash highs. And by yesterday it was up to 850 from 750 pre-crash highs (or 13%).

3. Why is the sequester not affecting the Dow? That is a more complicated question. But it has to do with the U.S. having the best economy relative to the rest of other country's economies and low 10-Year U.S. Treasury rates. The latter is for investors who want to park their capital and be guaranteed a return OF their capital; while the former is a calculated risk by investors to park their capital and play for a return ON their capital. Also the sequester's affects don't happen right away. 

4. There is an old investing adage. Don't fight the Fed. There is demand-side and supply-side economics. And then there is monetary economics. The Fed controls the latter. As long as the Fed continues to buy mortgages - mortgage origination's and mortgage rates - will continue to fuel new home buying. New homes matter. They have to be furnished. And that stimulates the economy. One of the lessons of the Great Depression was the 1937-1938 Recession. The Fed contracted monetary policy. It had devastating affects. It was quickly reversed and the economy continued to grow until by early 1941 - well before Pearl Harbor - the economy was firing on all cylinders. 

5. If the Fed policies continue, their will continue to be a bull market until the full affects of the sequester take affect (about a year). Is it time to buy now if you are bullish? No. You wait for a correction and then buy. When and if the Fed policies change? Run for cover. But you don't have to wait for that trigger. If the contraction affects of the sequester are not reversed? Being in the stock market - regardless of monetary policy - for over a year - will be a disaster. Again the lessons of the 1937-1938 Recession apply. Not only did expansive monetary policy have to be restored; but so did fiscal policy. That is what Ben Bernanke was trying to tell Congress last week.