Four straight weeks of stock market gains without even a minor pullback to retest the support at the 30-day m.a. again. In the 7th straight month of gains since the November low.

It does have a lot of scrambling going on to reverse previous opinions, and a lot of interesting observations.

Financial Times: “The equity market is putting disciplined investment approaches to the test. The adage ‘Don’t chase a rally’ is a core principle in investing. But such advice counts for little at the moment. After spending much of April unable to break through 1,600, the S&P has mainly been a one-way bet in May, rising an additional 4.4% to 1,670. All of which places both private and professional investors in a quandary. . . . In the current momentum driven market we are on the cusp of partying like its 1999, all the while flirting with the danger that when the music stops the consequences of having bought anywhere near the top are likely to be brutal and swift.”

Comstock Partners (Hedge Fund): “Although the Fed, so far, has been able to lift stock prices, it has failed to elevate the economy to a point where growth is self-sustaining despite over four years of extremely easy monetary policy. The headwinds from fiscal policy will actually intensify in the months ahead.

It is also noteworthy that the market is losing the important boost it has received from rapidly rising earnings.  Over the last four quarters earnings are up only 0.4% from the four prior quarters.  Given sluggish U.S. and global economic growth, we think that current estimates of 22% second half earnings growth are highly unrealistic.   Furthermore, the S&P 500 is now selling at 20 times cyclically-smoothed trailing GAAP earnings, at the very high end of the zone that was considered normal prior to the serial bubbles of the last decade and a half.

All in all, we believe that economic growth and corporate earnings will be highly disappointing in coming quarters and that investors will drop the pretense that the Fed can fix everything that ails the economy. Although Bernanke, himself, has been virtually begging for help from fiscal policy, it does not seem likely that he will get it anytime soon.  In our view, the risk of a substantial decline in the market outweighs the limited rewards from current levels.”

Reuters: “As the major indexes inch higher and higher to set record after record, many analysts are shrugging off previous pullback worries. . . As the market continues its upward move, some market participants are beginning to reverse opinions of it being a bubble to thoughts that it might rather be the start of a new bull market.”

Okay, I can agree that it isn’t a bubble, but the start of a new bull market? That’s an opinion I’ve seen frequently lately.

Doesn’t make sense to me. How can it be the beginning of a new bull market when the bull market that began in 2009 remains intact?

By the way, note how the S&P is not just unusually overbought short-term above its 30-day m.a., but even more so intermediate-term above its long-term 200-day (40-week) m.a.

But as I’ve been saying, an overbought condition is not a sell signal. Markets can just become more overbought. It takes a reversal of momentum and money-flows showing up in technical indicators. And while that seemed to be threating in April, it didn’t come to pass, and the consensus of our technical indicators remains on the Dec. 11 buy signal.

But we are still advising caution at this point and being alert for potential changes. Something just doesn’t smell right, and it involves not just the overbought condition, but the unusual bullish investor sentiment at a time when the economy and earnings are slowing.

Meanwhile:

Gold is still droppin’.

Like all its previous rally attempts since the October peak, gold’s most recent rally attempt off an oversold condition also ran into problems when it reached the resistance at the 30-day m.a.

But it’s now at an interesting juncture.

Another rally attempt from here would be with a potential double-bottom in place, while a break to new bear market lows would likely bring another dose of intense selling.

At the moment anyway, the consensus of the 35 intermediate-term technical indicators we use remains on the October 15 sell signal.

And it’s not encouraging for gold’s outlook that the gold mining stocks, which have been leading the way down, did break down to a new bear market low this week.

I was surprised to see the comments of famed commodity trader Jimmy Rogers, who has been correctly very bullish for gold for years, that while he expects the ”correction” to continue for a while yet, he would “not start to be concerned that this is more than just a correction unless gold drops to $800 an ounce”.

Gold is already down $513 (27%) an ounce from its peak at $1900 in 2011, already officially in a bear market, not just a correction. At $800 it would be down 58%. I can’t believe he was quoted accurately, that it would have to be down 58% before he would be concerned. But the comments were repeated in numerous sources.

Investor Sentiment.

In recent blog posts I’ve pointed out the unusually high level of bullish investor sentiment, as measured by the NAAIM Sentiment Index (National Association of Active Investor Managers), the Investors Intelligence Sentiment Index (newsletter writers), the Consensus Inc. Sentiment Index, etc., and record level of margin debt.

Here’s another one:

The Credit Suisse Fear Barometer, known as the CSFB Index, fell 11.4 points over the past two weeks – the largest decline on record – and is now at a one-year low of 21.73.

The indicator essentially tracks investors’ willingness to pay for downside protection with zero-premium collar trades that expire in three months, using S&P 500 index (.SPX) options.

“It’s unusual to see at these stock market levels that there are very few indications (based on options activity) that investors are expecting a pullback,” said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.