While I have always liked health-care giant Johnson & Johnson, it's hard to recommend taking a position at these levels.

The stock is already up more than 22 percent on the year and trading at a price/earnings ratio that is more than twice that of rival Abbott Laboratories and eight points higher than Pfizer.

Some traders are betting that Paychex will make new highs later this year.

OptionMonster's tracking programs detected heavy buying in the December 37 calls, with more than 2,500 contracts purchased in volume that dwarfed the previous open interest of just 20 contracts. Premiums rose from $1.22 to $1.40, but most of the options priced in the middle of that range.

These calls lock in the price where investors can buy shares in the payroll processor, which is parked at its highest level in almost five years. If it breaks resistance and continues to run, those options stand to generate significant leverage. And if it drops, traders will lose much less money than they would owning shares.

The S&P 500 has never increased this much in the first four months of the year without a three-day pullback, and CNBC's Jim Cramer sees that as proof that this market is for real.

"It's a bull market," he said on "Squawk on the Street" on Tuesday. "That's the kind of statistic" that demonstrates it.

Cramer urged investors to look at the companies that missed street expectations: Apple, Exxon, IBM, Amazon, 3M, AT&T, Procter & Gamble, Intel, Qualcomm, General Electric, United Technologies, United Health, JP Morgan, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, Caterpillar, McDonald's, Starbucks and Pfizer.

"Those all disappointed, and we're at all-time highs! Isn't this what the S&P is?" Cramer asked. "It says that things must be getting better. The second half must be getting better."

"I believe that this is a harbinger that things are getting better and we're going to be paying more for stocks," he said.

Searching for answers, Cramer said he sees Federal Reserve Chairman Ben Bernanke leading the charge. But, he added, CEOs he has spoken with say that "Europe has bottomed, China is coming back and the U.S. is getting stronger."

On the other hand, some negative indicators may give investors pause. For example, he said, "copper has to break out; copper doesn't look good. These are signs that the economy is not getting good."

"There are dichotomies that make it very difficult. The bottom-line number means a lot more than people realize, or else we wouldn't be where we are. It obviously was not revenue growth that the investors care about. Instead, they cared about yield."

International Business Machines shares are virtually unchanged from when Warren Buffett outlined in Berkshire Hathaway's 2011 shareholder letter why he wouldn't mind a flat share price over five years.

IBM's announcement Tuesday that it will increase its quarterly dividend by 12 percent to 95 cents and authorize an additional $5 billion in share buybacks proves Buffett's opinion, even if the "Oracle of Omaha's" comments in the Feb. 25, 2012 shareholder letter raised some investor eyebrows.

It's springtime, and that means it could be a good time not just to rotate the crops but the sectors as well.

A strong but somewhat uneven stock market rally in the first quarter has strategists looking for underperforming areas to overweight, and overheated areas where exposure needs to be pared back.

In practical terms, that could mean more money flowing to areas such as energy and certain foreign markets, while the defensive sectors that did so well in the first quarter could begin to see outflows.

"Sector rotation is one of the most used phrases to discuss moves in the market, but nine times out of 10 the person citing it has no way to show it," Bespoke Investment Group noted in a report.

(Read More: Algorithms Replacing Analysts & Investors)

However, as the second quarter enters its second month, some of the trends are becoming more visible.

Last week, technology hardware and materials led gainers after underperforming earlier in the year, while defensive sectors such as household and personal products as well as drugs and biotechnology ceded their positions, Bespoke found.

BlackBerry has been a great beta trade for some time, and option traders are looking for the smartphone maker to spike much higher.

OptionMonster's tracking programs yesterday found some curious prints in the September 27 calls, which were bought for $0.22. That's a crazy high strike for a stock that closed the session at $15.61, up 3.93 percent.

These calls lock in the price where investors can buy stock in the smartphone maker. Because the options are much cheaper than the shares, they can result in significant leverage if BlackBerry moves in the right direction. The September 19 calls were also active, but much closer to the money.

Citigroup is set to be among the biggest beneficiaries of a rise in housing prices, KBW analysts said in a report released on Monday.

Citi's mortgage loans account for less than 7 percent of its assets, much smaller than most of its major competitors. According to KBW, mortgage loans make up 23 percent of total assets for Wells Fargo, followed by US Bancorp (18 percent), Bank of America, PNC Financial (roughly 17 percent each) and JPMorgan Chase (7.3 percent).

As Boeing puts the problems with the 787 Dreamliner battery behind it and brings down production costs, the stock can climb higher, say analysts.

"The bull case for Boeing was always free cash flow generation of the 787," Carter Leake of BB&T told CNBC on Monday.

After moving to the sidelines on the name when the battery problems in the Dreamliner surfaced, Leake admitted he was wrong and is back with a "buy" rating on the stock and a $110 price target. The stock is up nearly 22 percent so far this year.

If economic reports being released this week are positive, the market may climb for the rest of the year as cheap money drives investments, CNBC's Jim Cramer said Monday.

JC Penney, for example, lined up a five-year $1.75 billion financing package on Friday without an equity component, which many in the market expected. "This shows you this market wants to go higher. There isn't any sign that there is a turn in (JC Penney's) business and no one cares," Cramer said on "Squawk on the Street."

"It's a buoyant market, and I think the data this week, if it's benign, will make it so that we are beginning to have people thinking it could be a 15 percent plus S&P year, which would be rather remarkable," he said.

Pitney Bowes has performed very well this year, and buyers were active last week.

OptionMonster's tracking systems showed heavy activity in the July 15 calls and the July 17 calls. A trader apparently sold 15,000 of the 15s for $1.40 to close a winning position, then bought twice as many of the 17s for $0.50.

These calls lock in the price where shares can be purchased in the company, which provides software, hardware, and services to enable physical and digital communications. The trade is looking for further upside in the stock, which has a large short interest and a high dividend yield.