"I'm waiting for confirmation there. It was a stunning reversal postelection. We really like the financials on any weakness. We like the airlines. There's a lot of money rotating now, trying to find the best sectors. Our odds of breaking down have diminished. We're going to wait for the Nasdaq and S&P to confirm their highs. On a near term basis, we're likely headed higher," said Paul LaRosa, chief market technician at Maxim Group.
But the market also is sending signals that it's overbought and LaRosa and others say there could be a brief period of reversal. "I would not be surprised in a pullback. I don't think you blindly buy all of the market," he said. He said he would buy tech, in addition to financials and airlines, on any dip.
Stocks have surged since Donald Trump's surprise victory in the presidential election, and bond yields have moved higher on expectations that his tax and fiscal stimulus programs will generate growth as well as inflation and higher interest rates. The 10-year yield rose to 2.30 percent Thursday.
"[The stock market is] reacting to what people think is going to be very pro-business legislation," said Steve Massocca, managing director with Wedbush Securities.
But Massocca too said the market is getting stretched.
"We are due for a correction. It's a pile of newspaper kindling and some logs. All we need is the match," he said. But Massocca said he expects a shallow pullback, and the Russell may need to only shed about 3 percent.
He said the relative strength indicators point to oversold conditions in a number of indexes. "The Russell is the one that's really gone haywire. Relative strength is 74, and in the last five years it's never been there before," he said. The relative strength was just 66.7 when it hit its June 2015 high. "The S&P is not as stretched as the Russell," he said.
There is a gaggle of Fed speakers Friday, after Fed Chair Janet Yellen's testimony Thursday before the Joint Economic Committee of Congress. Yellen, like many other Fed speakers, reaffirmed a rate hike is coming soon.
"Yellen pretty much put the stamp on a December rate hike," said Justin Lederer, rate strategist at Cantor Fitzgerald.