A Frustrating Trend In The Stock Market Continues To Break The Bears' Hearts

Stock prices are going up as earnings expectations are going down. And earnings expectations are arguably the most important drivers of stocks.

In technical terms, strategists will call this multiples expansion. In other words, valuations are rising as reflected by an increasing price-earnings ratio.

And this divergence between stocks and earnings expectations has only gotten wider since we last wrote about it a month ago,

"Since the end of the fourth quarter (December 31), analysts have also reduced earnings growth expectations for Q1 2013 (to 2.2% from 2.5%) and Q2 2013 (to 6.7% from 6.8%)," writes FactSet's John Butters.

Here's a chart from FactSet showing stocks rising and earnings expectations falling.