I keep a large spreadsheet of market statistics and went through it to see if I can find a hint of which way the market is likely to go. The statistics are mixed and are not pointing to extreme bullishness or extreme bearishness, nor a market that is oversold or overbought. There are some statistics pointing to too much bullishness, but there are roughly just as many pointing to too much bearishness. Seasonality is now mixed as well.
It seems as if the market wants to test the high end of its range after rejecting the lower end last week. At the same time the situation in Europe seems to be worsening with spreads at their widest since the Fall and economic data pointing to a slower economy than just a few months ago. I continue to believe that the best course of action is to wait for the bulls or bears to push things too far and fade them.
On a side note, late yesterday it felt as if market participants began to get a little giddy. I am starting to hear chatter of a win/win market because Bernanke has the market's back. Bernanke always had the markets back, including 2008, last Summer and the Summer before that but it didn't help prevent steep declines. If the bulls manage to push the market to a marginal new high I believe it could likely be faded but will withhold judgement until I see how market participants react.