The Wilshire 5000 index closed today at 11876.32. The January high was 11873.48. The traditional McClellan Oscillator closed today at -246.87, which is more oversold than at the lows of most of the pullbacks during the 2002 to 2007 cyclical bull market. If we were close to the January low, I might take a different view, but the fact is that pessimism has swung very rapidly to the bearish extreme (see Mark Hulbert's Commentary today on Marketwatch), which supports a continuation of the rally - for the time being. We will probably continue to test the January highs until the market has time to build a base for the next move higher.
A move to new highs after the events of last week is what is needed to solidify the bull market optimism in preparation for a more significant decline.