S&P 500 finding life in Q4, even if earnings don't

The S&P 500 index has gained 4.7% so far in the fourth quarter through Tuesday's close to reach a 24.5% year-to-date return, hitting 23 new record highs so far this year. The index began its run Oct. 8 before crossing the 3,000 mark, previously reached in September, on Oct. 21 and added 10 new high-water marks over the over the next 17 trading periods.

Forward earnings estimates, however, have not kept pace with the index's recent advances. While earnings estimates have stabilized in the fourth quarter, they have followed a general downward trajectory since January, suggesting the consensus view on fundamentals is not in step with the current value of the index.