We saw a stark change in the attitudes of market participants yesterday as the crowd seemingly turned cautious. Leveraged Rydex traders flipped from bullish to bearish in a single day. I cannot recall such a swift move to bearishness from these traders. The put/call ratio at both the ISE and CBOE showed heavy put buying as well.
As readers know I have been looking for a correction. I would have preferred if the market had actually gone down first before market participants turned cautious. While there are certainly enough signs pointing to the need for a correction it is possible that the market stages one more rally before the correction starts. A rally later this week would occur just in time for the market to become intermediate term overbought. It would also likely vanquish the new found doubts of market participants.