TECHNICALS-SPX

The markets continue to trade near their highs with the best performing major market index being the QQQQ followed by IWM with SPY and DIA bringing up the rear.

Market internals continue to trade with a very bullish 3,500 more winners than losers and our guy Bob Pisani excited about all the cash on the sidelines. Someone should remind him that its August and its not such a great seasonal period for owning stocks.

Sector leaders continue to be tech, semis, brokers, airlines, midcaps and biotechs; laggards are oils, metals and consumers.

Trading signals say:

Volatility indexes all oversold at or near 10% below their 10 day SMA's and the 2 day RSI's on all the major market indexes are near the 90 line. The SPX is at 1280, which is significant overhead resistance and it is unusual for the markets to make much upward progress when the markets are this overbought based on my signals. Problem is, we have a big report tomorrow in the CPI index and if that is benign, the markets could continue to move higher. I think all ETF holders (shorts and longs) need to keep there trades on a tight leash.