Last August 7, half the sectors were more than 7 percent below their 52-week intraday highs with energy in a bear market and materials and utilities in correction, or more than 10 percent below their 52-week intraday highs. The small-cap Russell 2000, which is watched as a leading indicator for broader market moves, was nearly 7 percent below its 52-week intraday high.
The Russell on Monday hit a fresh 52-week intraday high of 1,235.78 and closed Friday at its highest for the year so far. The VIX was a touch above Friday's levels and near 11.6 late Monday morning.
Financials climbed 1.9 percent Friday to lead the S&P 500 to a record close. The sector had lagged as the only one in the red for 2016, but Friday's gains took financials positive for 2016. All 10 S&P 500 sectors were within 6 percent of their 52-week intraday highs Monday.
"The market today has more breadth … and now the market again is stronger in terms of the internals," Krosby said.
To be sure, the concern is a low VIX points to a complacent market that could easily be shocked, especially in a seasonally weak period. Since World War II, one-third of all monthly declines of at least 5 percent in the S&P 500 occurred in August and September, according to S&P Global Market Intelligence.
Deming also noted that VIX futures for September and October point to levels above 15 and 17, indicating "some anticipation that [volatility] at some point is going to pick up in the next two months."
But for August, the VIX futures contract was below 13 intraday Monday.