What I can tell you is that the Investors Intelligence readings of 46% bulls is high relative to where we've been, but relative to where we generally are when the market takes a major dive because bullishness is at an extreme, it's not that high. A reading in the 50s, if not the high 50s, is what I call an extreme bullish reading.

The put/call ratios are a problem in this market on a daily basis. They have begun to show consistently low readings, and eventually that consistency should manifest itself in the moving average of the put/call ratio halting its decline and starting rising. It hasn't so far.

Another intermediate-term indicator I continue to watch like a hawk is the McClellan Summation Index. On both the NYSE and the Nasdaq, it continues to rise. When I first started discussing a correction two weeks ago, the NYSE required a negative net differential of -2,000 (advancers minus decliners) to roll over, or flatten out. Today it requires -1,200.

Think of it like this: Two weeks ago it would have taken one major decline of several down days to roll this indicator over, but as of today, a couple of down days could do it. So time becomes a factor in the market as well.

In terms of the Nasdaq, we use volume for this McClellan Summation Index. Two weeks ago it required a net differential of -1.8 billion shares (up volume minus down volume). Quite a bit. As of today, it requires "only" -1 billion shares to roll it over.

My point is that these are intermediate-term indicators, and it takes time for them to turn up and down. This sideways action we've seen over the past few weeks hasn't turned them down, but it has made it easier to turn them down.

For those of you who don't think this is a correction, I would point out that on May 1, we closed at 1409 on the S&P; we closed yesterday at 1408 and change. Doesn't that sound like a correction to you? Keep in mind that a correction can be sideways or down -- it is a period of digestion.

At some point we will have digested enough to either go up again or we will have seen enough selling to know that the next decline is more intermediate in nature. What we do know is that it is hard for the market to keep on rising when the indicators are as stretched as they are.

We have seen consistent group rotation in this market. On days where the banks lag, the commodity stocks are up. On days where the commodity stocks lag, the tech names are hot. When tech gets overdone, buyers move back to the banks. And so on.

Therefore, I don't think there is a negativity bubble out there (too many bulls to call it that!), and I don't think we have extreme bullishness either. What we have is a correction -- for now.

Overbought/Oversold Oscillators

For more explanation of these indicators, check out The Chartist's primer.