Stock investors entered the Fourth of July holiday on a high note, pushing the Dow Jones Industrials Index above 17,000 and the Wilshire 5000 Total Market Index above 21,000, and even pushing the S&P 500 to a smidge above the upper trend line of its long-standing bullish ascending channel that has been in place for nearly three years.

Stocks continue to hold up like troopers even though bulls have lost some traction, perhaps due to a combination of the summer doldrums and overbought technical conditions that have them biding time until the next setup for a run at new highs. To be sure, bears are AWOL and missing their opportunity to create some fear and ignite a correction.

U.S. stocks just continue to cruise right along, although investors seem to be displaying a healthy level of caution, looking over their shoulders as they whistle past the graveyard and bet on ongoing improvement in corporate earnings and economic growth. Despite extremely overbought technical conditions and regional hot spots that may ultimately threaten global economic recovery, investors seem undeterred.

After its long-awaiting breakout of the 1900 level the other week, the S&P 500 gained another +1.3% last week alone, but this double-low progression as I call it -- i.e., on extremely low volume and with persistently low volatility -- is worrisome.

Stocks ended last week on a high note, closing a smidge above strong resistance at 1900 for the S&P 500, which set a new closing high for the large-cap index, albeit on low pre-holiday volume. With the Memorial Day holiday giving us a short week of trading, all eyes are on voting in Ukraine, where a decisive win for billionaire business tycoon Petro Poroshenko seems assured.

We are seeing only slight movement to Sabrient’s Sector Detector ETF rankings, as Healthcare, InfoTech, and Consumer Staples continue to lead, while Materials sinks further into the cellar and remains the fundamentally most overvalued sector. 

Latest rankings: This week, SectorCast-ETF indicates that Healthcare (XLV) remains solidly in front on a forward-looking basis, with the highest score of 93.

Healthcare, InfoTech, and Consumer Staples continue to lead in the Sector Detector ETF rankings, based on Sabrient’s fundamentals-based SectorCast model. Actually, they increased their scores this week relative to the other sectors as the bottom-up speculative rally led to further overvaluation in the fundamentally weaker sectors. 

Riding a wave of positive corporate announcements -- among them, CISCO (Nasdaq: CSCO); The Blackstone Group (NYSE: BX); Coca Cola Bottling (Nasdaq: COKE); and Dynergy (NYSE: DYN) -- and a number of positive economic releases, the market bullied its way through resistance to make net gains every day last week for the S&P 500. The result was a 3.2% gain for the S&P and consistent strong market action through all cap/styles and all sectors.

Volatility returned to the marketplace with a vengeance last week, and we should be prepared for more of the same this week. On Wednesday, Thursday, and Friday the market moved 2% or more – in opposite directions each day.  The S&P 500 was down 2% on Wednesday, up more than 2% on Thursday, and down again on Friday nearly 3%.