'Overbought' Dow Sails Away From Worry

A torrent of ominous news about the consumer Tuesday was not strong enough to prevent the stock market from staging an impressive rally.

Each tick of the S&P 500 toward a new record and each tick of the Dow Jones Industrial Average past 13,000 has investors wondering when this technically overbought market will correct again.

Traders worry that the complacency that led to late February's retrenchment has returned. But the strong global economy combined with M&A and better-than-expected earnings still trump concerns about weakness at home as the indices march on to new highs.

"Folks are still excited about Dow 13,000," says Al Goldman, chief market strategist at A.G. Edwards. "On Wall Street, add three zeroes to a 13 and you have the land of milk and honey."

The DJIA closed up 0.6% at 13,136.14 Tuesday. The S&P 500 and the Nasdaq Composite each gained 0.3% to close at 1486.30 and 2531.53, respectively.

Goldman notes that the market's recent move has been fast and furious. The Dow has risen 9% since its low this year on March 5. Rich Ishida, chief technical analyst at Market Vane, agrees, noting that bullish consensus reached a two-year high for the S&P at 75% at the end of last week. It stands now, still overextended, at 72%. The Nasdaq Composite registered a new 24-month high with a 77% bullish consensus.

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