This was the week where all major U.S. equity indexes finally broke above their 50-day moving averages. But most of them are still hovering well below their 200-day moving averages as well, which represents a broad and strong level of resistance.

An indicator that measures the percent of stocks over their 50-day moving average shows the market has suddenly reached extreme overbought levels as seen in the following chart:

A 70% level is considered overbought with this indicator and as you can see on this chart that level is only hit about four times a year in a good year. The current percentage of 81% has not been seen since July of 2014 and is a very rare overbought occurrence.

A thing to note on this chart is how short a time these percentages hold up – rarely more than a month, suggesting that this market is likely to see a short-term pull back any time now.

For a confirmation that all is still not well we only need to look at how well stocks are doing relative to the 200-day moving average, now the next major resistance level:

This chart reveals that most equities remain well under their 200-day moving averages, which should act as resistance now for another leg down in what is still an ongoing bear market according to our charts and signals.

It is possible that stock prices may hold up through the end of the filing deadline for tax returns this spring. We often see this happen so Americans feel like they can afford to pay their tax bill in April. But after April 15 the scene often changes and stocks are often liquidated to help raise cash for taxes and to rotate out for a while.

Hence the popular “Sell in May and Go Away”.

On the other hand, the technical charts are right at the top again, making it hard to believe that bullish players might be willing to holding prices up for another month to six weeks. Technically, the charts are screaming for a short-term pull back – all that is needed is an appropriate catalyst.