What's the worst thing that could happen?
The Dow and S&P go to a new high and form an even larger megaphone bearish reverse wave top.
The market is evidently defying gravity that for many has been psychologically unbearable, and unexplainable. The answer is a purely manipulated market.
The deep pockets on Wall Street are squeezing out every last penny in the remaining glamour stocks. Most of these "dogs" are trading for at least a 15% premium, and even within in a thinly traded market, it still is liquid enough to jam the shorts to new recovery highs.
S&P 500 Daily Chart
Preventing any catastrophe, the only evidence negating this stated bullish possibility is for prices to break below 1380 on a weekly closing basis.
S&P 500 Weekly Chart
Historically, when broader internal indicators are not only overbought, but diverging, you are basically WAITING for an intermediate decline.
The downward expectation has so far has been totally absent and the fact that the market continues to defend the 1400 level is suspiciously bullish.
We know the downside risk overrides this immeasurable bullishness eventually, but until we see a steeper sell-off, the bulls remain in control.
Crude Oil will be one to watch. It moves in tandem with the market, but neither stocks nor the economy can withstand higher prices at the pump, at least not at this rate.
Crude Oil- Daily Chart
If oil can push a bit higher, it's less likely the market can sustain a strong upward advance. That's why I think if there is one last hurrah in all markets, this has the potential to be it.
The VIX being already overbought does not quite suggest a market top either. There is potentially a Head and Shoulders Top on the hourly chart that could allow more downside.
VIX- Hourly Chart
In my opinion, it will hold above the 13.30 level and set up a buying opportunity. This scenario would create a divergence between equities and the VIX, marking a likely reversal point.