That was one of the dullest pullbacks I have ever seen. But for now, the market is doing a decent job of working off that overbought reading and high level of complacency.
Take a look at the Overbought/Oversold Oscillator, and you can see it is finally curling over. Quite frankly, the math says it could turn back up, but by Thursday it would be heading back down again. That's the nature of being overbought like this: It just gets hard to make significant progress on the upside, until we see a correction or sideways moves to digest.
But, once again, we saw breadth outpacing the indexes. In fact, the S&P 500 might have lost 20 points, but breadth was positive on the day. As long as breadth is positive, the market is in decent shape. It's when breadth gets negative and in turn rolls the indicators over that we see bigger problems. For now, the indicators are rising. Should that change, then an overbought market with high levels of complacency is negative.
I would note that complacency continues to run high. One of the best examples I can offer is the 10-day moving average of the equity put/call ratio, which is now closing in on .45. You can see the last few times it got down here, stocks stopped going up. In September they came down. In October as well.
On Wednesday, we will see this week's Investors Intelligence readings, and I expect the bulls to be over 60%. Once over 60% that will be a sign of far too much complacency for my taste. Despite the good breadth, I still expect to see the market pull back or at best chop in the next several days to work off that complacency and overboughtness.
Away from that, I was asked to update my view on Bitcoin (GBTC) , which I had written up here with a positive bias last summer, as I cited that big head-and-shoulders bottom that had developed. It has now gone almost parabolic, as it has doubled since October. There is a first target in the $20-$21 area. If we take the top of the pattern (around $13) and subtract the low (around $6), we get around $7. If we add $7 on to $13 we get $20. Keep in mind these are approximations. (Also, note the $6 low is used here, because I don't use the spike low, but the area where it spent time.)
If, however, we use the bigger pattern, we can take the high at $17 and subtract the low at $6 to get $11. Then, we can add $11 onto the breakout that came just over $11 (almost $12) and get a target closer to $23. If it pulled back and had a correction back toward $18, it would be buyable again.