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Is this bull for real?

It's the first question every investor asks me these days, the one we hear talked about on every business TV program (including ours) and see written about in every business periodical (including, FORTUNE, the one I work for).

Sounds like a reasonable question. But it drives me nuts. Here's why.

The question is based on the presumption that the stock market is up to something, but we don't know what it is yet. Since stocks have risen substantially -- more than 20 percent -- over the past few months, people wonder whether this means the bull market is "for real" -- that is, whether the crafty old stock market plans to continue going up.

It's the linking of these two thoughts -- the market has been going up, so will it continue going up? -- that in fact makes absolutely no sense, though it seems to be a deeply human impulse. We're all hard-wired to recognize patterns, to assume that past behavior tells us something useful about the future. Often this tendency serves us well: If a job applicant has been jailed for embezzlement four times, you probably wouldn't hire him; the best prospects for donations to a charity are those who've given to it before; the spot on the lake where you caught the most fish last summer is probably where you'll catch the most fish this summer.

Trouble is, we carry this same habit of thinking into areas where it's totally unjustified. Before crossing the street in Manhattan, I've caught myself staring at the "Walk" sign for a few seconds to see if it really means what it says - as if its willingness to say "Walk" is evidence it will continue to say "Walk," when in fact just the opposite is true. In behavioral experiments, researchers find that when people see a penny come up heads on five consecutive flips, they sometimes assume the penny "likes" to come up heads and will do so on the next flip. Other people insist the penny is now "due" to come up tails on the next flip. In fact, of course, the penny has exactly the same 50-50 chance of coming up heads or tails on each flip.

We do the same senseless thing with the stock market. Since it has been going up, we tend to think it's engaged in some kind of continuing behavior, like the embezzler or the charitable donor. That's what we mean when we ask if the bull market is "for real." But in fact, the stock market behaves from day to day much more like the penny. What it did over the past day or week or quarter tells us nothing -- absolutely nothing -- about what it will do tomorrow.

The evidence, I'm afraid, is overwhelming. If the market's past behavior could tell us anything useful about its future behavior, then investors could formulate trading rules that would enable them to win consistently. Researchers would be able to discern patterns that could be used to forecast future price movements.

They've been trying for over 100 years. In 1900 French researcher Louis Bachelier went looking for price patterns in France's commodities markets. He found none. Since then researchers have studied price movements in British stocks, American cotton and wheat, the Dow 30 stocks, and other U.S. shares, with increasingly powerful computers and statistical techniques, and have never been able to detect patterns. (One researcher did find, to his amusement, that series of random numbers often produced the head-and-shoulders pattern that technical traders believe is especially significant.)

None of which means we shouldn't try to forecast the market. It just means that doing so requires real work. We have to talk to business people and consumers, read the papers, look at economic data, and think hard about what it all means. We have to figure out what will happen tomorrow by understanding the people who will make it happen, not by trying to parse the numbers reporting what they did yesterday.

So is this bull for real? It was for real the past six months. But thinking of the market's rise as some kind of continuing event is a trap that can only lead to problems. It's history. Let it rest in peace. And instead of asking whether this bull is for real, let's start each day with a clean slate and ask what kind of market is likeliest now.