As anyone reading this blog has guessed, I think stocks will drop some more. I believe a new trend low is possible from here.
The above chart shows an Elliot Wave count for the SPX, along with a chart of Advancing Issues. I think the rally from the January low is all part of an upward correction, as both up-legs are choppy. If a new bull market was starting, there would be a nice 5-wave up move to kick it off. WaveB seems to be forming as an irregular flat, where Wave-b undercuts the WaveA low, and Wave-c rallies above the Wave-a high.
The second indicator that points to a top is the Advancing issues chart. I first read about using this indicator at Carl Futia's blog. It shows the breadth of the market, i.e. whether the strength or weakness in the stock market is reflected across many or few stocks. Divergence occurs when the SPX makes a new trend high, but the Advancing issues chart does not. This indicates that the market is being propelled by fewer stocks, and that the move is probably not sustainable. You can see some other examples of divergences on the chart. Now, there is a fairly clear divergence forming, and I think this upmove is near an end.