The market is definitely overextended- up close to 17%.  That said, it can continue that way for some time.  My exposure is basically nil and I have added to my volatility position and bought January 180 SPY calls.  These positions are hedged so they do not affect my exposure today, but as the market goes down, I will get short.  If the rally continues, then I will get modestly long.

I am debating whether to wager my current years performance on this idea of getting "long volatility".  It is a bit bold only in the sense that summer is coming up and often the market can get caught in a doldrums of sorts and not really go anywhere.

We have a situation right now where there will be no new earnings for a while and the economic news is getting better on the domestic front with tax receipts causing the deficit to be less than anticipated.  So congress will be out of the news for a bit perhaps (negative for volatility).