Is it going to be the morning after?

In a span of 15 months, i have seen a black Monday(Sensex down 1000 pts) and a golden monday (sensex up 2200 pts, upper circuit hit, mkts closed for the rest of the day). Indeed markets have very short memories. On March 9th anything and everything was getting sold. On May 18th anything and everything was getting bought.
What would explain this irrational exuburance ?? The markets seem to think that the UPA govt will change the face of India. To some degree they would, but the market has conveniently forgotten about the budget deficit and that the current government was in power for the last 5 years as well. A 7-10% surge was warranted, but the kind of franctic buying - $1bn of FII investment with PE of 15.4x (above the long term average of 14.5x) . FII's can very easily pull out money as they put money in, so for a retail investor it would be key to look at fundamentals, rather than sentiment. Surely, it seems the momentum is huge - it remains to be seen how long this rally will last