Markets produced their strongest returns in four years in October – ignoring a steady stream of bad economic news and lousy corporate earnings.

The Dow Jones Industrial Average soared 8.5% while the S&P 500 jumped 8% for the month.  The Nasdaq Composite Index was driven higher by strong big tech earnings. It skyrocketed by 9.38% and is now back above 5000.

Last week’s gains were muted with the Dow rising 0.1% or 16 points and the S&P 500 rising 0.2% or 4 points, so perhaps the jubilation is ebbing. The Nasdaq Composite Index gained 0.4% on the week.

Of course, some strategists are calling for the rally to continue and for the market to gain another 10-15% by year-end.  All I can say is that if they want to send over what they are drinking, I will take a sip. But I will not reach my hand into my pocket and follow them into the market. The market is extremely overbought and investors should proceed very cautiously from here.

Credit markets also joined the party. The average yield and spread on the Barclays High Yield Bond Index rallied by 59 and 67 basis points, respectively, in October. That’s an extremely strong performance. The average yields on energy bonds and basic industry bonds – the weakest industry sectors – even rallied slightly, though they still remain deeply distressed.

The spread on Barclay’s Investment Grade Bond Index also rallied by 11 basis points back down to 150 basis points. The yield on the 10-year Treasury bond ended the month at 2.15%, after the Fed’s October meeting predictably led to nothing. The Fed has continued to play Hamlet regarding a potential 25 basis point interest rate hike in December.

Fed Promises and Large-Caps are Driving the Delorean

October’s gains were of the “Back to the Future” variety as investors piled into momentum trades – all based on tired central bank promises to keep printing money until the global financial system simply collapses under its own weight.