The superlatives that are being used to describe this market are well-deserved. $SPX has advanced so fast that there really isn't any support, unless you want to declare the low of the "half-day" correction at 2825 a minor support area. The one clearly defined support area is the 2680-2700 area that was formed in late December and from which this January rally was launched.
Call buyers are making money in this market, and they are piling in with a vengeance now. The equity-only put-call ratios are dropping even more rapidly than they previously were. That makes them overbought, but they are on buy signals.
As usual, market breadth is the killjoy among the technical indicators. But the market hasn't much cared what breadth has to say, and it doesn't right now, either. Both breadth oscillators are on buy signals, albeit just barely.
Volatility indices remain at low levels, although not as low as they were at the beginning of the year. $VIX has a minor uptrend in place (see blue line on the chart in Figure 4). But $VIX has still not been able to close above 13, so it's not too worrisome at this point.
In summary, $SPX remains in a bullish state, and $VIX remains below 13. So the intermediate-term outlook is positive. The growing overbought conditions will certainly have to take a sharp toll eventually, but one cannot blindly short this market -- that would have been a disastrous approach. Rather, wait for confirmed sell signals before trying to trade what could be a sharp, but likely short-lived, correction down to support near 2700.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.