Herding just made the front page of Marketwatch. Stock analyst herd mentality highest in nearly 30-years. The dispersion index of earnings estimates hasn't been this undispersed since the mid-eighties. In other words, Wall Street is all together in its outlook for company earnings. And it sounds unanimously above the companies themselves.
"This comes at a time when company outlooks for earnings are very negative. According to three analysts that track earnings, corporate profit warnings are at record highs, with nearly 90% of the companies that have provided outlooks offering views below the Wall Street consensus." [emphasis added]
Not sure if this means that companies are sandbagging on a massive scale, or that Wall Street is too bullish. But put together with other sentiment figures such as the widely-touted Investors Intelligence bull/bear ratio (also at a 30-year high) it appears to be another example of herding.
Regardless, the market may have some unfinished business at the highs. If the S&P gets above 1843.45, new highs become a very high probability. How this would fit into the overall pattern remains uncertain as it has become ambiguous. As things look now, there should be ample divergence if new highs occur, so a sustained breakout looks doubtful. However, I do have multiple Fib extension targets at the 1870 area.