There have only been four down days in January, and as a result the market is very overbought.

The intermediate-term indicators are mostly still positive at this time, although there is one glaring exception -- a new sell signal (just registered today) from the standard equity-only put-call ratio.

Other intermediate-term indicators remain positive, though. For example, $SPX is still clearly in an uptrend. However, if the 1260 level were breached, that would be much more bearish.

Breadth indicators remain on buy signals. $VIX remains in a steady downtrend, which is also bullish.

In summary, a short-term correction should begin almost immediately. But the intermediate-term bullish trend should be able to reassert itself.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and also publishes several option trading newsletters.