While the S &P 500 (SPX) and the Dow Transports (DTX) both managed to eke out another new high (all-time high for the Transports), there are cracks beginning to form in the bulls' armor. To wit the following:
1. The DTX--a leader in market direction--was actually moving down from the open, in contrast to the SPX and Nasdaq.
2. Despite the gains made over the past week, the small-cap Russell 2000 (RUT) hasn't been able to close above its previous support level at 1160.
3. While the VIX is still firmly planted in the bulls' garden, the implied volatility of the VIX is rising.
4. Buying pressure is drying up and selling pressure is increasing, as measured by the VWAPs (a measure of institutional buying and selling).

Now this doesn't mean that the market is going to reverse tomorrow, but the ground isn't looking as firm as it has been. While this earnings season seems to be humming along, stocks are starting to become fully-valued and once the bargains are gone, who will be left to buy?

Today's Notable Movers & Shakers
It was hard not to notice the 300% move in Puma Biotechnology (PBYI). The stock soared on news of a MUCH better than expected cancer drug trial. While this situation is the wet dream of many investing in these early-stage biotechs, it's worth noting that this is the rare exception rather than the rule. Playing these biotechs with serious money is highly risky and more people have been sent to the poor house by betting on them than by those who have profited from them. I know the ones who need to hear this are the ones who don't want to--please don't let that person be you! Playing with money you can afford to lose is the only prudent way to gamble. (I don't mean to be a downer but I've seen too many acquaintances lose their shirts over betting the farm (literally) on these biotechs with drugs that are promised to be "sure winners.")

On a cheerier note, the airlines continue to head into the stratosphere. Breaking out of recent consolidation today were Southwest (LUV, $29; +3%), Allegiant (ALGT, $125; +2%), JetBlue (JBLU, $11; +5%). Chartwise, these stocks appear to have the wind at their tails and further upside looks likely. However, these stocks, too, are becoming richly valued (unless the companies have raised their forward P/Es) and should the market start to crack, these stocks could fall with it. Replacing long stock with long call options might be a less risky way to play richly valued stocks in extended rallies.