$SPX has been up 8 out of 10 days, and advances have led declines 10 days in a row. March S&P futures have been up 10 days in a row, too, which is supposedly a record. These are all signs of a massive short-term overbought condition.





Equity-only put-call ratios remain solidly on buy signals, and they are not particularly overbought as they are more or less in the middle of their recent ranges.




However, market breadth indicators are very overbought. It is already surprising to me that the market has been able to forego a correction while these breadth measures are this overbought, but this is a situation that will surely result in at least a sharp, but short-lived correction.




Volatility indices continue to decline, and that is bullish for stocks. Some are saying that $VIX is "too low," but that may not be true.




The intermediate-term picture is bullish, but the extreme overbought condition poses a serious short-term problem. Once the pattern of positive daily breadth is broken, the market should correct.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.