I'd love that chart if the present S&P 500 wasn't so extended above the upper band of the Bollinger Bands. The SPX and the Dow are simply overbought which doesn't mean you go out and load up on puts or short the market, but the likelihood of a brief, but sharp correction is increasing, especially with a relative strength reading above 80 on the Dow. The above chart is bullish, but at this point perhaps too bullish. I'm still targeting 1550, but with a few bumps along the way.
As noted earlier this morning, the benefit of the doubt still tilts in favor of the bulls as long as global liquidty is able to fly around the world unabated. Deal flow has remained hot and heavy as well and that is also good for street sentiment especially when the deals come with rich premiums. Trim Tabs says that between last Friday and this past Tuesday there were 4 cash takeovers announced totaling over $8 bln and 17 stock buybacks announced in the same time frame amounting to more than $4 bln. Deals and buybacks are still far outpacing new stock offerings, but offerings are tallying back into the multi-billion dollar levels and that's something to keep an eye for indication of a market top if new offerings get out of hand.
Economic calendar features jobless claims Thursday.