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By Lawrence G. McMillan

The market broke out to new 2011 highs this week.  Some of these indices are actually making new all-time highs, having exceeded their 2007 peaks.  The chart of $SPX now has a new bull market trend line, connecting the August and March lows.  The breakout over the old highs in the 1340 area could measure targets to nearly 1400 on this move.

Equity-only put-call ratios have remained on buy signals for some time now.

Breadth has been strong of late, and both breadth indicators are in overbought territory.

Most recently, $VIX has dipped below 15, which is quite low -- the lowest it's been since June 2007.  Four years ago, $VIX was on the way up, and a bear market was about to emerge.  Now, it's on its way down, and that's bullish.  Still, $VIX below 15 has to be considered a bit overbought.

In summary, it is very positive that the market has broken out and followed through.  The technical indicators remain largely positive, and that should be supportive of a further intermediate- term move.  The only problem at this time is the fact that overbought conditions are beginning to appear, which could lead to sharp, but short-lived corrections.

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