ROSENBERG: I See 10 Signs That Show The Stock Market Is Overbought

The Dow meanwhile, had set a few record highs in the first quarter.

All this bullishness has prompted many Wall Street analysts to raise their year-end S&P 500 price targets. Though of course, some warn that stock prices will tumble in the next two quarters.

In a new note, Gluskin Sheff's David Rosenberg that it is "exciting" to see the S&P 500 hit an all-time high, but that "beneath the veneer, some signs of 'nonratification' or at least 'overbought' readings are starting to take hold." He offers 10 reasons:

1. Too much exuberance - Many are repeating the mistakes seen during the highs of 2001 and 2007 and believe things are good, because of the way the stock market is currently performing. "One must wonder if this is a classic case of performance chasing at the highs. Those jumping in now after a give year period in which the major averages have soared 135% and without the major components of the economy having fully recovered could end up being a classic case of bad timing."
2. Volume - The average daily volume for March is about 12 percent lower than year ago levels.
3. 50-day moving averages - "There has been a deteriorating share of NYSE-traded stocks trading above their 50-day averages in recent weeks… in other words, leadership is narrowing."
   
4. Insider selling - Corporate insiders have been some of the biggest sellers in the past few weeks.
5. Defensive sector are seeing highs, not cyclical stocks - "It is very rare to achieve new highs with defensive sectors that shield investors from recessionary pressures dominating the leadership board, like Healthcare and Consumer Staples, while economic sensitivities like Tech and Materials rise the rear."
6. Bulls are investing cautiously - "Leadership has come from defensive sectors such as Consumer Staples and Healthcare, along with high dividend-paying stocks. If bulls are backing recovery, they are investing cautiously." In Q1, the Dow was up 11.3 percent, the S&P 500 was up 10 percent and the Nasdaq was up 8.2 percent.
7. Rising short positions - NYSE short positions went up 2.4 percent in the first half of March.
8. Historical trends - In each of the past three years, first quarter rallies are followed by "a stutter and sputter well into the summer months."
9. Buying power is nearly maxed out - "Portfolio managers only have an average of 3.7% of cash on hand relative to equity assets under management."
10. Dow Theory advocates are silent - At the start of the year, Dow Theorists were looking at transportation stocks and seeing 'buy' signals, but, these stocks have come off their highs. "I don't want to take this too far, but the weekend WSJ does quote the legend Richard Russell as saying that a move in the Down Transport index to 6,100 from the current 6,255 level would be a vivid signal that the overall market has topped out (so at least we have some time then in order to make a judgment call, at least based on this indicator)."