If the Australian stock market were a 20-20 cricket team, it would be about 1/80 after the first five overs. In other words, it would have the game well in hand, even if it were early on. Plenty of wickets to play with. Plenty of runs on the board.

In fact, the stock market resembles at T20 game more than test cricket. Every news event matters in today's market the way every ball matters in T20. And sometimes you see wild swings, big risks taken, and a distinct lack of strategy. But it sure can be exciting.

The Aussie market opens in the context of the S&P 500 making a five-year high. Last week's minutes from the December Federal Open Market Committee meeting scared investors for all of about one trading day. The idea that some Fed governors may support ending the bond buying program this year doesn't seem to worry anyone too much - maybe because no one believes it.

There are other signs of first-quarter euphoria around. The iron ore price is up 70% from its August lows of last year. It's back over $150. BHP Billiton and Rio Tinto both believe the rebound is due to Chinese restocking and the cyclone season in the Pilbara. In other words, they think the eventual spot price will be lower. But that hasn't stopped investors from cheering.

But even the commodity/China story we've all grown to know, love, and depend on is taking a back seat to another trend in the market. High-yielding Australian stocks are the current 'it' investments for global investors who want yield. The evidence of this is that fact that the Commonwealth Bank (ASX:CBA)has a market capitalisation of $100 billion.

CBA is still half the size of BHP in terms of market cap. But its new shiny $100 billion cap makes it the ninth-largest bank in the world, by market cap. If you strip out the state-owned banks in China, CBA is the fifth-largest bank in the world. It trails only HSBC, Wells Fargo, JP Morgan, and Citigroup.

This news confirms the point Greg Canavan made in his 'Fuse' report late last year: Australia is a two-speed economy with an oversized banking sector, and is dependent on China. In that same report, Greg also suggested there would be a concerted effort by the news media and the investment industry to promote stories that give you the impression that everything's fine. Everything is not fine, Greg reckons.

Despite the underlying anxieties of the bears that something's not right, there are signs that the market could go higher before it goes lower. Take the Volatility Index, or VIX, for example. You can see on the chart below that the 'fear index' fell nearly 38% in one day last week. It's back near a 52-week low. The US 'fiscal cliff' deal led to a giant sigh of relief, and then a rally.

For Aussie investors, though, the chart below may be even more instructive. It shows the Australian dollar hitting a four-year high against the Japanese yen.

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