When a horse is leading into the home stretch, it can mean it's just hitting its stride or is about to tire. Same with the stock market as October approaches.

And it turns out it's been slightly more common to see some fatigue set in than for momentum to build further.

The Dow is on track to post its ninth-best run through the first three quarters in the past 50 years. History suggests the odds are better than average for a bit more upside in the final three months – but the results are not quite as strong as in years when stocks have risen less through September.

The Dow’s total return (including dividends) is on track to finish this last session of the third quarter up between 15% and 16%. The index has returned at 15% or more through September in only eight prior years in the last half-century, the last time in 1997.

Up five, down three

According to a historical screen run upon request by Schaeffer’s Investment Research, in those previous eight years when a 15% gain had built up,

The bears have been greedily feasting on what’s left of J.C. Penney Co. (JCP) for months.

The most heavily shorted stock in the Standard & Poor’s 500 Index, Penney shares have collapsed by 50% so far this year to a 13-year low, as its disastrous merchandising changes under former CEO Ron Johnson deflate sales and drain the company’s cash rapidly.

Yet Penney is a glaring exception rather than the rule in the 2013 market, in which short-sellers have largely gone hungry. In fact, the most heavily shorted stocks in the market have gone up on average more than the broad market has, a trend most gaudily shown by the rocket flights of Tesla Motors Inc. (TSLA) and Netflix Inc. (NFLX), up 430% and 240% this year, respectively. The AdvisorShares Ranger Equity Bear ETF (HDGE), a short-selling fund, is down 20.3% in ’13 -- more than the major indexes are up.

The stocks that have drawn the largest number of skeptics extended their advantage in the September market rebound. Bespoke Investment Group

When Western Union Co. (WU) was founded in the mid-19^th century, the “Western” referred to the most distant reaches of the U.S. telegraph system at the time, in the Mississippi Valley. Today the company operates in 200 countries and territories – every nation, in fact, but North Korea and Iran.

And while Western Union no longer handles singing telegrams, its unique network of half-a-million money-transfer agents allows customers to send cash whistling virtually anywhere on the globe, from Times Square to a remote Asian village.

Western Union has been listed on the New York Stock Exchange since 1865; it developed the first successful stock ticker in 1869 and, in 1884, became one of the original 11 members of the Dow Jones Industrial Average. It's now a company that helps knit together the 21^st-century global economy, with its ever-deepening cross-border economic interconnections and unprecedented mobility of labor and goods.

Skeptics abound

But neither Western Union’s pedigree, its

Medical-device maker Stryker Corp. (SYK) greeted investors Wednesday with a deal to spend $1.65 billion, nearly all the company’s net cash, to buy surgical-robot upstart Mako Surgical Corp. (MAKO).

A demonstration of robotic surgery

The bid, for $30 a share, is an 86% premium to Mako's prior closing price and 10-times projected 2014 revenue. Mako, incidentally, is a not-yet-profitable company that appeared overvalued enough to professional investors that 25% of its shares had been sold short.

MAKO shares in midday trade were up 82% to $29.50. Stryker shares, meanwhile, dipped only around 2% to $69.10, shedding less than half the value of the Mako deal and retaining nearly all the stock’s 27% gain this year through Tuesday.

Not a unique response

Typically, acquirers' shares are reflexively punished upon unveiling a deal, to account for the premium paid, dilution of existing shareholders and risks of making buyouts pay off. But investor equanimity in response to a company making a bold, expensive acquisition is not

Following the Fed's surprise move on Wednesday to stick with the current pace of its $85 billion a month quantitative easing policy, global markets correctly discerned that roughed-up emerging-country stocks had won a reprieve. And the most hard-hit emerging markets, specifically India, appear poised to benefit most from the relief rebound.

Ben Bernanke is not central banker to the world. He has, in fact, disclaimed any direct consideration of emerging markets' financial conditions in his policy decisions at the Federal Reserve. Yet the way markets in Jakarta, Mumbai and Sao Paolo have reacted to his word and deed, he and his colleagues might as well have been acting on the developing world’s behalf on Wednesday.

As global investors and their perspicacious trading machines absorbed the news of a quantitative easing status quo, nearly every asset price surged aside from the dollar, which dove hard. Stocks, gold, oil and bond prices all popped higher. And emerging-market stocks,

It’s always dangerous to spin stories about exactly why markets are behaving as they are. And a major hazard of the past few years has been the instinct to point out financial bubbles that weren’t there.

But, granting all that, sometimes writing about Wall Street means running toward danger — especially when a provocative narrative is also plausible.

So here goes: Breaking down recent market action and tracing optimists’ arguments to their logical conclusion, it seems the markets are hinting bubble-like conditions could emerge before too long.

The immediate, obvious prompt for this observation is the stock, bond and currency markets' rush to bid up risky bets the moment it was reported late Sunday that Lawrence Summers had pulled out of the running to succeed Federal Reserve Chairman Ben Bernanke.

Mis-impressions, major stock surges

Despite a thin evidence trail, investors had built up a mis-impression that Summers would be quicker to tighten monetary policy than the other

Wall Street pros pine for a “stock-picker’s market” the way Washington pundits extol “bipartisan cooperation” and sportswriters plead for jocks to show hustle and humility.

All of these are idealized conditions, according to conventional wisdom – the way the system was supposedly meant to work, adhering to reason and rewarding effort.

Well, we now have such a stock-picker’s market – more so than any time since before the financial crisis – with tickers moving according to individual company substance and the stories analysts tell about them. Performance-stalking investors are understandably welcoming this shift.

But they might also bear in mind that, when the tape begins to winnow winning stocks from losers to an extreme, it is one clue of a complacent market that can be insufficiently alert to large macroeconomic risks, which have diminished but not disappeared.

Going Their Own Way

Both to the naked eye and according to statistical measures, individual stocks are increasingly going

If you can’t fathom why shares of Sears Holdings Inc. (SHLD) are up 20% this week and 27% year to date, you must be among the multitudes who believe the stock price depends on Sears’ fortunes as a retailer.

No. While the company’s Sears and Kmart stores continue to struggle with declining sales and brutal competition from their big-box rivals, Sears as a stock has for years been more about financial engineering, the value of submerged corporate assets and the surplus of traders who have wagered against Sears by selling the relatively scarce stock short.

The latter short-betting crowd periodically gets squeezed out through higher share prices. That’s what’s happening now, thanks in part to an aggressively bullish investment presentation by one of the company’s larger institutional shareholders, which suggests its best real estate assets alone are worth more than the company’s market value.

Edward Lampert – the billionaire former hedge-fund manager, chairman, CEO and controlling