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Stocks overbought; traders await central banks

European Central Bank President Mario Draghi.
Emmanuel Dunand | AFP | Getty Images
European Central Bank President Mario Draghi.

The good news is that stocks are on a real win streak. And it's a broad win streak, with previous laggards like the Russell 2000 also showing strength.

The bad news is that we have moved very far, very fast, and many sectors and indices are now in classic overbought territory, including the NASDAQ 100, the S&P 500, and even Germany.

Of course, markets can — and do — remain overbought for a long time.

Read More Why stock bull Tom Lee still sees double-digit year

If you believe — as many do — that the bulk of the rally is due to expectations that the Bank of Japan (BOJ) and the European Central Bank (ECB) will continue and even add to their quantitative easing programs, and that the Fed is on hold, pay attention to next two days, because all the Fed officials are speaking, though they may not directly address the issues of most concern to investors.

Central Bankers speaking:

  • Today: ECB President Mario Draghi speaking at 1 p.m. EDT
  • Wednesday: Fed Chair Janet Yellen, Fed Vice Chair Stanley Fischer, and New York Fed President William Dudley
  • Friday: BOJ Governor Haruhiko Kuroda

If the Fed is going to begin tightening in December, you would at least expect Fischer and Dudley to begin laying the groundwork now.

Decidedly not oversold are commodity companies, which are having a simply horrific year.

Read MoreGoldman Sachs: What to expect from commodities as China slows

Commodity companies YTD:

Alcoa is having its analyst meeting today. The top issue is the pending split up of the company into an upstream division that engages in alumina production and smelting, and the faster-growing value-added division that makes aluminum for the aerospace and vehicle industries, including the aluminum Ford F-150.

But there's no getting away from the continuing overcapacity and decline in aluminum prices. Last night Alcoa said it would idle three of its four active U.S. aluminum smelters. That is a radical move, the steepest cuts yet by an aluminum producer and a sign of how bad things have become.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street