My favorite sentiment indicator, the PPO of the equity only put call ratio, is approaching an oversold level associated with pullbacks since the cyclical bull market began in 2009 as denoted by the dark green line. The lower green line is associated with the bottoms of major corrections. If the current pullback is to remain as such and not turn into a larger correction, then it needs to find a bottom soon, otherwise we can expect the selling to intensify over the coming weeks. My hunch is that some sort of bottom will materialize over the coming week. Whether it will be enough to reignite the intermediate trend remains to be seen.
One factor that is encouraging is the Dow, which did not undercut its November 1 low this week. I believe it is tracing out a much larger triangle as discussed earlier.
However, trend following indicators are now neutral to bearish, which is not a good sign. IBD has now called the "Market In Correction" as of yesterday's close, and that deserves serious consideration under the present circumstances. I still think it is premature to be looking short even though there have been a few high profile collapses of late. There are just not enough of them to warrant taking that side of the market right now.
The best case scenario is that today's low is the low of the pullback. The worse case scenario is that the selling will continue into the end of the year. If the former, we should know fairly soon. If the latter, we can short after the next rally failure.