The short stochastic of the S&P 500 is at the highest level since 2008, just prior to the high of 1,440 made on May 19, which preceded the huge sell-off to 820. And the same is true of the other indicators like Moving Average Convergence/Divergence (MACD), the Relative Strength Index (RSI) and a host of others.

Except for volatility indices, the CBOE Volatility Index (VIX) and the CBOE Nasdaq Volatility Index (VXN), other sentiment indices like the America Association of Individual Investors (AAII) weekly survey are telling us to be very cautious since the public is becoming more bullish.

AAII bearish sentiment has declined for three weeks, and on Wednesday reported that 38.27% were bearish versus 54.47% and 70.27% for each of the prior two weeks. But most alarming of all, the AAII members have become more bullish, with 45.06% bullish. This is the first time that they have been bullish on balance since Jan. 8.

But as the market is becoming more overbought and due for some serious selling, two major commodities -- gold and oil -- are establishing new bull markets. And the word stagflation is whispered more loudly as the U.S. dollar declines while other commodity and stocks and futures are attracting more buyers.

One way to profit from the commodity boom is with the ProShares Ultra Oil & Gas (NYSE: DIG). Demand for crude oil and precious metal could drive DIG higher, which is why it is my Trade of the Day.

Sam Collins is a contributor to OptionsZone.com.