I am still grading the papers Newsmax readers submitted on last week's Transportation index chart homework. Some of you continue to be bamboozled by a logarithmic scale. Keep in mind that investors measure their performances in percentage terms. "I made 16% on my investments last year." A logarithmic scale makes such percentage changes easier to see for stocks that are at different prices.

I thought I would add some comments about what fundamental events could bring this cyclical bull market to an end.

On the economic front, there are two obvious candidates: slowing economic growth and higher interest rates. Be careful to look beyond the front-page headlines and focus on the future, not data from two or three months ago.

Small businesses have begun to increase hiring in some of the latest data, no doubt encouraged by the delays in Obamacare, which kicks in big time when a company hires its 50th employee. Why this stifles job growth seems to be mystery to our current administration, but they have lost control of the debate and agenda of legislators — including Democrats — who want the economy to be stronger in 2014. Stronger job growth would improve consumer income and confidence, a major component of gross domestic product. So it remains unlikely that a recession is anywhere nearby.

With respect to interest rates, the story remains the same. Exchange-traded funds for both Treasury bonds and indexed Treasury bonds have touched new lows recently, not consistent with a belief the economy is slowing.

Gold has been strong. But this arrow in the bear's quiver is more likely a reflection of current events in the Middle East and capital flight from the region. As long as the unrest can be contained (how, I wrote about a few weeks ago) to the Middle East countries, the course of events remains bullish. A dysfunctional Arab axis would need to sell oil to finance their civil wars as well as be less able to confront the West with solid economic and political pressure.

As 2013 fades and the 2014 mid-term elections loom, farsighted investors need to measure whether low tax/regulation candidates (usually Republican) are likely to gain. Pay more attention to the outcomes for state legislators and governorships, which are the seed for continued fiscal and monetary reform.

Next week: more emphasis on the role foreign affairs will play in the U.S. and other markets.