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Why the rally has room to run

We close to a record in stocks and we had a record IPO last week, but have the gains run their course?

The S&P 500 closed Friday near its highest level ever. On that same day, China's e-commerce juggernaut Alibaba went public, raising a record $21.8 billion.

A lot of contrarian traders may see this as a top about to happen. However, one market watcher isn't ready to walk away from U.S. stocks just yet but only because everything else is even more unappealing.

(Read: Sixth weekly gain in seven as Dow ends at record)

"Searching for signs of tops is really difficult in these kinds of markets because what you're seeing right now is clearly there is nothing else to buy," said Gina Sanchez, founder of Chantico Global.

Federal Reserve dovishness, monetary easiness by the European Central Bank, and economic weakness out of China are all depressing bond yields and equities worldwide, said Sanchez, a CNBC contributor. "It makes U.S. equities the only thing to buy," she explains. "That doesn't mean it's the best thing to buy, but it is the only thing to buy."

Nonetheless, Sanchez is worried about U.S. stocks. "Where we are right now is a house of cards," she said, adding that liquidity policies are propping things up. "As long as all that is in place, it probably still goes up."

Todd Gordon, founder of TradingAnalysis.com, agrees with Sanchez that U.S. stocks will head up but disagrees that it's because of a lack of alternatives.

"The Bank of Japan is… going full-blown with quantitative easing," said Gordon, a CNBC contributor. "The Nikkei is breaking out to new highs. We have China opening up $81 billion in loan facilities to the banks. Chinese stocks are doing well. Baidu is breaking out. We have participation with tech, financials, and consumer discretionary. All these sectors are moving."

(Watch: Week ahead: Analysts forecast crosscurrents for markets)

Instead, Gordon thinks a powerful trend is pushing up U.S. stocks. "You have to respect the trend of this market," he said. "If you look at the S&P 500 charts, it's just on a one-way freight train right through the clouds."

So what's a trader to do? Gordon suggests keeping an eye on 2,138 in the S&P 500. That level is significant because it is a Fibonacci level based off the decline from the 2007 peak to the 2009 market low. "2,138 is my target," he said. "It doesn't mean I'm going to go short. It means we're going to trade towards that target."

In the shorter term, Gordon also likes how volume has increased in all U.S. stock exchanges over the last two weeks. "As we're starting to ramp up and break through these old highs, you're seeing participation come back in," he said. "This is broad-based. I think with all the central banks behind us, you need to respect this trend. I'm long this market. I'm going to stay long."

To see the full discussion on the S&P 500, with Sanchez on the fundamentals and Gordon on the technicals, watch the above video.

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