Markets discount the news

It is said that markets discount the news. Charles Dow, the father if Dow theory stated that all of the information available is reflected in the averages.

With that in mind we have to consider the rally in the stock market averages over the last two weeks. We went from sharp losses to sharp gains. And the news that precipitated those gains: That Greece was bailed out, again.
And the markets rallied back to near their recent highs. This is at a time when "everybody" knows that Italy and Spain and Portugal and Ireland are also on the list of "imminent" default!
In the coming week we are going to hear more about the woes of Europe and how the Euro as a currency is doomed, and how the economies of Europe, with the exception of the robust German economy, will slow down and that will affect the whole world at a time when the U.S. economy is sluggish and fragile, and China is fighting inflation by raising interest rates, and oil and energy prices are on the way back up, and the U.S. Congress is debating whether to let the U.S. govt. default on it's own debt.
And all of that is old news, and the markets are up.
I can only conclude that the markets are going to go up.
There will probably be some sort of decline over the next couple weeks but I have a strong suspicion that the stock markets will handle the decline well.
As I look over a couple hundred individual stocks I am impressed by how many are set to make new highs.
And only a couple months ago I was thinking that a major top had arrived. I think that what made it seem so ominous was that I could see it coming.
Here are a couple charts. I am struck by the volume surge in the S&P 400 midcap fund, IJK.

And the Naz,

Part of stock market "wisdom" is that there is no such thing as a triple top. Meaning that by the third time a stock reaches a high price it has had every opportunity to go down, and will almost always go higher. Individual stock rules don't work as reliably in the stock averages, but I have to wonder, what are these indexes doing back at the highs with all of the bad news out there?