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A 6 for 6 Market as the DJIA And S&P 500 Close at All-Time Highs

NEW YORK (TheStreet) -- The U.S. stock indexes made it six for six on Friday as the S&P 500 and the DJIA closed at all-time highs.

Friday was triple witching options expiration and the DJIA closed higher by 25.62 points at 16947.08. The S&P was up 3.39 points at 1962.87. The Nasdaq was higher by 8.71 to close at 4368.04 and the Russell 2000 finished up 4.39 at 1188.42.

When this market rally will end is anyone's guess, but there is no disputing the fact the market is overbought.

The CBOE Market Volatility Index (VIX.X) closed at 10.85 (no fear). There is absolutely no fear in this market and the Fear/Greed Index provided by CNN Money shows a closing number of 95. That is extreme greed and a contrary indicator. I have never seen a number that high before.

In addition, I continue to show negative divergences on the daily and weekly indexes according to my internal process. I have been saying this for a long while now, but the fact remains, the numbers do not lie.

The S&P Goldman Sachs Crude Oil Trust Index ETN (OIL) was once again higher and now up 12% for the year to date. The IShares Barclays 7-10 Year Treasury Bond Fund (IEF) was higher on Friday and is now up 3.5% YTD. The Commodity Research Bureau Index CRB is up 11.4% YTD.

If you couple that with the fact there have been sharp increases in livestock and poultry prices over the last 10 years in the face of stagnant wage growth, a decline in savings rates and a declining U.S. dollar you have a situation that is not good for the U.S. consumer.

Turning attention back to the stock market, the risk associated with buying the stock indexes at these levels is extraordinarily high. This is a hedge fund-chasing momentum machine and for you traders out there who love to chase momentum, you better be aware of the mine fields. This is a classic case of buying at the all-time highs and unwinding those positions at the lows. That has never made sense to me and never will. The buy-high, sell-low crowd is a fool's game.

As I continually scan the markets everyday for subscribers at, looking for those stocks that are extremely oversold to buy and extremely overbought to short, I am only finding those stocks that are extremely overbought. It has been that way for over a month now and that is why I am cautious on this stock market.

However, I go wherever my algorithm numbers take me. On Friday, I closed my short position in WageWorks Inc (WAGE) that I started on Thursday for a huge gain. I also added to my Akamai Technologies (AKAM) short. I started new short positions in Twitter (TWTR) and Rosetta Resources (ROSE). Both have an extraordinarily overbought number of 100.

At the time of publication the author was short AKAM, TWTR, and ROSE.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

>>Beware, Apple Investors: The Stock Has Moved Up Too Far, Too Fast

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