To put it in perspective, the S&P 500 is also up a ton from the mid-August lows -- but it is up a little less than 12% from the lows to Friday morning's new recovery highs. Not that the current high-tech leaders can't continue leading the march higher, but they typically take a breather after a move of this sort.

Certainly arguing for some kind of pullback is the chart below, which shows a series of unfilled gaps -- the most recent of which was Thursday's gap at the 2088 level, which beckoned this morning. And guess what. Its call was answered, as the NDX pulled back to 2087.98 (not shown on the chart below) and bounced.

That takes care of that gap, but there are others. Then on the upside, there is the big round number at 2100, which is currently offering some resistance. That's all I need to see to sell and look for a pullback.

Nasdaq 100 (NDX) Stalling at 2100

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Then, of course, there is the real market, the S&P futures, the tail that wags the dog. This contract has been warning of stalling action since it pulled back from last week's high at the 1552 level.

You will note below that the S&P has made no net progress since that high on Sept. 19; in fact, it has been pulling back to the 1534 area on a daily basis. Why is that level important? Because that was the high the day of the rate-cut moonshot. And now it's support, at least short-term. This afternoon's low was 1533.30, and a pretty good bounce followed.

Here, too, there are gaps beckoning below. And this morning's pullback bottomed right where it should have, a fraction of a point below Thursday's gap. So it filled the gap and bounced, as it does almost daily.

There are still gaps below that haven't gotten filled. But this is about to be October, so I wouldn't bet against it.

S&P Futures Not much progress since the pop on the rate-cut news

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In addition to the overbought condition of the market, there is the sentiment picture, which argues for a pullback.

As you know, I had been expecting a contraction in the VIX following the Fed announcement on Sept. 18. No doubt, the subsequent collapse of the VIX wouldn't have been nearly as dramatic if the Fed hadn't made such an extreme move, which then triggered an equally extreme reaction in the market.

Since then, however, I assume we are getting a more realistic picture from the VIX, and it is telling a story that now is suggesting a buildup of significant levels of bullishness and complacency.

Now, earlier this morning, the VIX had dropped further to a new multimonth low of 16.91, narrowly undercutting Thursday's low of 16.95. As previously noted, readings at these levels are nowhere near the prior lows for the year near 10. But at the same time, I cannot regard such a sharp pullback from the recent highs as anything but short-term bearish at current levels. Accordingly, at Thursday's close, as the VIX scored a new multimonth closing and intraday low, on the chart below it appears as a repeat sell signal.

VIX/S&P 500 (SPX) Too many bulls on board for buying

Click here for larger image.

Source: optionsXpress