$SPX exploded to the upside after the Fed’s announcement that they
were not going to taper, with both new buying and short covering
entering into the fray. With $SPX now at new all-time highs, it has
positive momentum, but is also extremely overbought. This latter
condition will eventually lead to some sell signals, but perhaps not
$SPX should find support at 1710, the previous high, from early
August. A close below there would raise the specter of a false breakout.
The equity-only put-call ratios never did pick up on the rally. When both the put-call ratio and the underlying are rising together, that is a sign that hedging is prevalent. In this case, traders were buying puts for protection. Now, both ratios are on buy signals.
Market breadth indicators are bullish, but extremely overbought.
With $VIX 14, we judge that as bullish for stocks. In fact, as long as $VIX remains below 15, it is in a bullish state for stocks.
In summary, the bulls are in charge. Even though they have expended a lot of energy to get to this point, it is likely that prices will still move higher before sell signals eventually appear from the overbought indicators.