The oddest part of the trading day was how much intraday volatility we got, yet the Volatility Index barely budged. In fact, the VIX was slightly up on the day. Yet the Daily Sentiment Index (DSI) for the VIX notched down to 16.
It might not be extreme -- extreme would be single digits -- but it is certainly in the neighborhood. And it arrives in the neighborhood just as the Overbought/Oversold Oscillator gets overbought.

Notice that the Oscillator is at the highest level in a year. That's good news, because it means breadth has been really strong, much the same way it was in early 2021. But it is bad news, because the market is short-term overbought and therefore should struggle with upside momentum now.
Even Nasdaq's Oscillator, which has been a big laggard, is now overbought. But notice that Nasdaq's Oscillator is nowhere near the high achieved in early 2021, let alone a few months ago. I think that shows what I have noted: Nasdaq has been and continues to be a laggard. Recall it hasn't been able to take out the November high and the chart we looked at two days ago of the S&P relative to Nasdaq shows that it has at best kept pace and at worst, lagged.

For now, I do not think this overbought reading is bearish. The reason is the McClellan Summation Index is still rising. The cushion it has to continue to do so is a net negative 2,600 advancers minus decliners on the New York Stock Exchange. That would halt the rise and more would roll it over.
Should we get some choppiness in the market to work off the overbought reading, I would just monitor this indicator for signs that it is rolling over and therefore showing weakness underneath. For now, it's overbought and we should see a pullback or some choppiness. Especially with the DSI for the VIX at 16.

Away from that, we have the big rotation out of tech and into financials, energy, industrials and materials. But everyone sees that, don't they? It's hard to ignore.
Yet despite how ugly the chart of iShares Expanded Tech-Software Sector (IGV) , an exchange-traded fund for the software stocks is, has it broken? It has not. All I see is a chart that ekes out a marginal lower low and then rallies to a lower high (that's what makes the chart so precarious and ugly). But has it broken? No.
At some point this chart should break. My guess is it will do so in conjunction with a big market decline and a rise in the VIX and likely a vast change in sentiment. If and when that happens then I'll know folks are truly bearish these stocks. Until then, it's just an ugly chart that hasn't broken yet and has been going sideways for a month.