Stocks in Chipper Mood

The fact that there was no selloff in the U.S. points to the resolution of several concerns haunting investors in late Feburary's plunge. China's 9% one-day drop then added to fears about rising defaults in the subprime mortgage market.

This time, investors are relieved that the subprime mortgage problems haven't exploded into a financial crisis, and that no massive hedge fund blew up as the yen carry trade unwound. They are relieved that the job market remains strong, the consumer keeps spending, and that earnings are better than expected.

"There is more good news than bad news, and that is what the market is trying to price in," says Hogan.

Others warn that complacency has gotten out of control and that the march of new highs is about to end. Market Vane's measure of sentiment among futures traders is 74% bullish -- a two-year high.

"It looks like we're due for a correction again, but a correction within a bull market, not the start of a new bear market," says Rich Ishida, chief technical analyst at Market Vane. "Smart money is comfortable buying the dips."

Ishida notes that sentiment dropped only to 62% after February's correction, which was a sign at the time that the market would quickly ramp back up.