Stocks continue to rise almost daily. $SPX has gone on a tear since successfully testing support at 1540 about a month ago.(April 18th). This latest upside breakout now leaves the 1623 area as minor support.

Equity-only put-call ratios have plunged recently. That is caused by heavy call buying. Consider Figures 2 and 3: these 21-day moving averages rolled over to buy signals in late April, and they are overbought by the fact that they are at the lower regions of their charts.

Market breadth has been much stronger of late. As a result, our breadth indicators remain on buy signals and are in distinctly overbought territory.

Volatility indices ($VIX and $VXO) are perhaps less overbought than the other indicators. As long as $VIX is below 14, there is certainly nothing for bulls to worry about.

In summary, the market is getting frothy now, as overbought conditions build up. But that doesn't mean it will collapse, or event urn bearish any time soon. Overbought does not mean "sell."

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and also publishes several option trading newsletters.