Like I said at the beginning of November, I no longer buy the P1/P2/P3/etc. count anymore (The Large Count). I am still macroeconomically bearish and think we are still in a secular bear market (the current rally being a cyclical bull in a secular bear). But I think the timing of the bear market is stretching sideways, much like the NIKKEI has the past couple of decades.
I have updated the chart from my Nov 4th post and added some Fibonacci time intervals to measure some important time relationships of Cycle X with respect to Cycle C.
So while I think we are in the process of slowing down here in the midst of Silly Season, I am skeptical that it is "the top".
Some things that I will be looking for on the macroeconomic front that hasn't been observed to a significant degree: Overenthusiastic earnings estimates. The past few months I have been observing the unhealthiness in earnings growth (margin expansion) and I still stand by the fact that this is unhealthy. But the market is as much psychology as it is fundamentals. And analyst estimates have largely been in line with actual earnings for the past few quarters (regardless of how those earnings have been generated). At the beginning of 2009 we saw earnings estimates that were even lower than actual earnings. For market tops we want to see analyst estimates that are much higher than actual earnings. David Rosenberg did a very good study on this a couple of months ago, but I can't seem to find it right now.
We are heading in that direction. While a number of sentiment surveys are bullish and consistent with a top, I don't think the bullishness on the Street is commensurate with "the top".
Hard to say with this market. Corrective waves are hard to count and to know for sure when they have ended. And macroeconomics is good for determining the trend and drivers but is does not give good timing signals. This market is driven so much by psychology right now, and I think watching sentiment indicators (VIX, CPC, BPSPX, etc.) as well as earnings estimates in comparison to actuals will be very useful in determining the end of this (IMO) cyclical bull market rally.