March 2nd 2014: Is this a top? Probably not. Here's why in 3 charts.

Everyone wants to know if this is THE top in the markets.  In my view, probably not.

Here's why in 3 charts:

Perhaps the most important chart of the week goes to Ryan Detrick who showed S&P short interest surging to new highs.  This surge to near July 2012 highs implies that bears are still shorting this rip, hedgers are hedging, and bulls are buying insurance.  Historically, this level of short interest has matched with market lows which means that we could have a blow-off type move into late March/April, i.e., this latest rip could look like a low in late March/April.  Do not underestimate the power of this market to squeeze shorts and grind higher on low-volume.
Here's a link to the original article:
http://finance.yahoo.com/blogs/the-exchange/short-interest-on-the-s-p-500-surges-to-a-new-high-182007031.html

There are other a few other important charts that are worth nothing here.  Let's look at an equal-weighted weekly chart of the S&P500.  The S&P500 is a heavily market-cap weighted index which tends to mask the performance of the smaller  to mid-size components of that index.  If you apply an equal-weighting structure to the same components, you can see how the average stock is performing versus the high market-cap skewed version and the average stock is doing extremely well which is bullish.  The strength in the equal-weight index combined with the total short interest chart above makes a powerful bullish case.

Lastly, another force behind this bull market that can't be ignored is the power of rotation.  So, yes, some sectors and some stocks are frothy (ex., health-care/biotech), but what if some laggers suddenly caught fire?  What if 2 big lagging sectors of the S&P suddenly started ripping, namely financials and energy?  Their charts are starting to perk up here.  Here's a 150-day performance chart from stockcharts showing the lag.  You can check out this chart and adjust the settings for free here:

http://stockcharts.com/freecharts/perf.php?[SECT]