The S&P 500 has gone up 165 points or nearly 14% since Thanksgiving without a correction that lasts more than a couple of days. Some shorter term sentiment indicators such as Rydex and Hulbert short term newsletter writers are at an extreme. A short term correction would not come as a surprise given how extended we are.
Longer term sentiment indicators show investors remaining restrained, which is surprising given the sharp rise in the market. The S&P 500 is up nearly 25% since the October low. This type of advance is usually enough to get everybody bullish. I have spoken recently about the NAAIM survey and the Investors Intelligence survey not showing the type of bullishness one would expect. Last night ISI released their hedge fund survey which shows hedge funds net exposure at 44.3%, close to the lows. At tops hedge fund exposure is generally in the mid fifties. I don't know if I believe that ISI is correctly gauging hedge fund exposure but it likely means they are not near max bullish yet.
My assessment of all this is that there is still risk of a short term correction but a bigger move lower remains unlikely barring a systemic event.