Editor's Note:

We've been expecting the market to find a top in the second half of January. Today's action in the major indices certainly seems like it could be the beginning of the correction. However, the trend is still up so it's a bit early to start launching a bunch of bearish trades.

I'm not adding any new positions tonight. Nimble traders may want to hedge their bullish portfolio with some bearish positions on the major indices through ETFs (like the SPY, MDY, and IWM). A more aggressive trade on a market correction would be bullish positions on the volatility index (VIX). Or you could just wait and see but I would reconsider your stop loss placement on any bullish positions and consider taking some money off the table.

- James